Second paragraph of third chapter:
However, the Arrow-Debreu theory does not take into account adaptive interactions typical of a CAS [complex adaptive system]. From the CAS viewpoint, the ‘fully rational’ agent assumption is a very strong assumption. Each agent must act on full knowledge of the future consequences of its actions, including the responses of other agents to those actions. Clearly no realistic agent possesses such omnipotence. Arrow was aware of this difficulty from the start, pointing out that real markets involve diverse traders of bounded rationality, with different agents employing different strategies. Moreover, realistic agents change their strategies as they gain experience with the diverse actions of other traders—they adapt. Markets made up of such agents rarely reach an equilibrium, even temporarily; rather, there are often large fluctuations (‘bubbles’ and ‘crashes’) caused by the traders’ ongoing, diverse adaptations.
On the basis of reading two books from the series, I’m rather impressed with the Very Short Introductions from Oxford University Press (the other one I have read is Modern China, by my old friend Rana Mitter). I complained after reading one of the earlier accounts of complexity that I was still looking for a good introduction to the topic, and I think I have found it. Mathematics is not really my thing these days, but I found this a very helpful overview of the theoretical side of complex adaptive systems, pulling together a lot of topics that I vaguely knew about. I still need to find something on the more organisational management side of it, but this is a good start. You can get it here.
This was my top unread book acquired in 2019 which was not written by H.G. Wells. Next on that pile is When Christians were Jews, by Paula Fredriksen.
I read a bunch of books in this series a while back and was very impressed with them.