Being Human: Rational Models of Sapience – Lauren Meyers

In his lecture, Dr. Suresh used an economic approach to explore what it means to be human. When making their models, economists often assume that people are rational and act to maximize utility. However, humans do not behave in this way! Dr. Suresh explained that humans are really like Homer Simpson—that is, we are irrational, lazy, impatient satisficers. We do what is good enough and move onto our other tasks. These models do not account for our animal spirits. We think with our emotions are prone to react to psychological influences. When firms are excited by what is going on around them, they will likely be more ambitious. This heterogeneity and apparent unpredictability of human behavior lead to a profusion of results. However, Dr. Suresh argued that humans are identical through time. Only their environments and situations are different. We are irrational in predictable ways, and there are evolutionary bases for our behavioral biases. In a fairness study, scientists gave one monkey grapes and the other monkey cucumbers. The latter monkey was outraged at this inequity and began throwing the cucumbers back at the scientist. Economists have not yet discovered how to account for this human concern for fairness. In his research, Dr. Suresh is using simulation agent-based modeling in hopes of creating more realistic models. I do not think that we will ever be able to perfectly model human behavior in our economic models. However, every model should have some realism in terms of the question.

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