The paper starts out by pointing out the context-dependency of human cognition and behaviour, pointing out that (a) human behaviour can change sharply across contexts but also that (b) behaviour within a given context can sometimes be described in relatively simple terms . It thus argues against a grand theory of rationality that seeks to explain and/or generate human behaviour across of contexts. Rather it suggests an alternative approach whereby "mundane" accounts of rationality are used which are specific to a limited number of contexts. Such an approach has its particular difficulties, but allows the integration of narrative accounts of possible behaviours using a variety of social mechanisms at the micro level with comparisons with aggregate macro data. It is noted that in the resulting simulations that equilibria are simply not relevant within plausible timescales.

1. Mundane Rationalityas a basis for modelling and understanding behaviour within specific contexts Bruce EdmondsCentre for Policy ModellingManchester Metropolitan University

2. Social Intelligence Hypothesis (SIH) Kummer, H., Daston, L., Gigerenzer, G. and Silk, J. (1997) The crucial evolutionary advantages that human intelligence gives are due to the social abilities and structures it facilitates This explains the prevalence of specific abilities such as: imitation, language, social norms, lying, alliances, gossip, politics etc. Social intelligence is not a result of general intelligence applied to social organisation, but the essential core of human intelligence in fact our “general” intelligence could be merely a side-effect of social intelligence Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 2

3. Implications of SIH That different complex “cultures” of knowledge are significant An important part of those cultures is how to socially organise, behave, coordinate etc. One should expect different sets of social knowledge for different groups of people That these might not only be different in terms of content but imply very different ways of coordinating, negotiating, cooperating etc. That these will relate as a complete “package” to a significant extent, that has developed over time and passed down to new members Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 3

4. An Evolutionary Perspective Social intelligence implies that: Groups of humans can develop their own, very different, (sub)cultures of technologies, norms etc. (Boyd and Richerson 1985) These allow the group with their culture to inhabit a variety of ecological niches (e.g. the Kalahari, Polynesia) (Reader 1980) Thus humans, as a species composed of separate groups with different cultures and survival strategies, are able to survive catastrophes that effect different niches in different ways (specialisation) Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 4

5. Social Embedding (SE) Granovetter (1985) AJS 91 (3): 481-510 Contrasts with the under- and over-socialised models of behaviour That the particular patterns of social interactions between individuals matter In other words, only looking at individual behaviour or aggregate behaviour misses crucial aspects That the causes of behaviour might be spread throughout a society – “causal spread” Shown clearly in some simulation models Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 5

6. Illustration of Causal Complexity Lines indicate causal link in behaviour over time, each box an agent’s talk or action decision (Edmonds 1999) Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 6

7. Implications of Social Embedding In many circumstances agents can learn to exploit the particular computation and knowledge in their society, rather than do it themselves (invest in what Warren Buffet invests in) This knowledge is often not explicit but is something learned – this takes time This is particularly true of social knowledge – studying guides as to living in a culture are not the same as living there for a time Trying to make social knowledge explicit, rather than adapt to it may be infeasible due to the complexity of the social embedding Our personal networks of friends and colleagues becomes our extended social body Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 7

8. Context-dependency of Cognition “The” context is the situation of an event, but this is indefinitely extensive The brain somehow categorises and recognises different kinds of situation and preferentially gives access to knowledge on this basis, it is context-dependent Many aspects of human cognition seem to be context-dependent, including: memory, visual perception, choice making, reasoning, emotion, and language Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 8

9. The Context Heuristic The kind of situation is recognised in a rich, fuzzy, complex and unconscious manner Knowledge, habits, expectations etc. are learnt for that kind of situation and are retrieved for it Reasoning, learning, interaction happens with respect to the recognised kind of situation These learnt kinds of situation are socially co-developed in time becoming entrenched in society and passed down the generations For example: lectures, interviews, parties Not a general heuristic, but one particularly suited to the complexity of a socially constructed environment Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 9

10. The general idea for context-dependent intelligence fuzzy but rich learning & recognition of the context Action Perception precise reasoning & belief update within context Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 10

11. M1 M2 M1 Abstract to a context Clusters of Domain and Content make a Context Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 11

12. Implications of Context-Dependency Behaviour of observed actors might need to change sharply across different social contexts The relevant behaviour, norms, kinds of interaction etc. might also need to change Social contexts might need to be co-developed, changing and sometimes instituted (e.g. a lecture) These may need to be different for different groups Some kinds of social behaviour are necessarily context-dependent (compliance) It is unlikely that a lot of key social knowledge, behaviour etc. will be generic and hence amenable to explicit programming Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 12

13. Development of Social Context The context-dependency of cognition has a very social use, the development of mutually recognised contexts If a particular kind of situation is recognisable by participants Then specific language, habits, behaviours, norms, etc. will start to be developed for that situation The more that happens, the more the particular situation will be distinguishable Over time, social contexts become institutionalised and easy (for us as observers) to identify E.g. Lectures, parties, interviews etc. Indeed it seems we construct our world (buildings, etc.) to facilitate our context-dependent intelligence Affords identifiable opportunities to utilise the knowledge and computation of others, promoting social embedding, which in turn lock people in to these facilities Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 13

14. “General” Intelligence Intelligence: the ability of an actor/agent to decide what to do to achieve its goals in its situation and given its knowledge This is involves learning what works in any particular situation where there are time and resource constraints (e.g. how to socially embed when appropriate) Given the No Free Lunch theorems, this means that there is no “best” strategy for all situations, but rather each strategy is suited for particular kinds of situation Humans do not possess a general intelligence, but one with particular biases and aptitudes, e.g. to facilitate social organisation Unlike computation, there is no “general” model of intelligence – any generalisation, meta-strategy, mix of strategies etc. with be a disadvantage in some situations Looking for a foundational model of intelligence (one that can be specialised for particular circumstances) is hopeless, and recalls the doomed “Hilbert Programme” in mathematics Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 14

15. Implications for Models of and Implementations of Intelligence Whilst there are formal systems (some logics, set theory, Turing Machines etc.) that are “complete” in theory They all make some things easier to do and some harder, thus having representational biases It does not mean there is any general and effective means of finding the right computation even if we know one exists Rather, the structure of any intelligence needs to be suited to its environment and goals In particular, the intelligence of a social agent needs to be suited to its social environment Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 15

16. Herbert Simon Administrative Behaviour (1947) observed how people actually behaved in context, and it was not in any ideal form of rationality, but rather a set of relatively simple, but specific procedures “The human being striving for rationality and restricted within the limits of his knowledge has developed some working procedures… These procedures consist in assuming that he can isolate from the rest of the world a closed system containing a limited number of variables and a limited range of consequences.” (1967) Not the same as his later, and much copied, concept of “bounded rationality” which is just an hobbled version of an ideal rationality Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 16

17. An Illustration of Simon’s (1967) Rational Decision Making Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 17

18. Summary – Mundane Rationality There is no such thing as a general intelligence or rationality, even in theory All intelligence is biased towards its environment/problems Human intelligence is biased: Its survival advantage was social and thus so is our intelligence It uses a context-dependent heuristic: a mixture of context-recognition and crisp, relatively simple beliefs/strategies within these contexts Patterns of behaviour can be very specific to the particular context, but might be quite simple once the right context is recognised These patterns will be highly socially influenced but in a way that is specific to the context (which might include the group) Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 18

19. Consequences for Representing Human Behaviour in our Models Given all this there are three approaches: Make simple specific models only within a particular context (“in vitro” modelling) Identify the separate contexts and have a (at least somewhat) different model for each along with a mechanism for recognising when context switches Allow agents to individually learn the specific behaviours in a context-dependent manner and socially situated manner (resulting in among other things social embedding) Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 19

20. 1. Behaviour within a single context Models might be simple, but you don’t know a priori which are applicable in the context It might be that traditional models of rationality are OK in some contexts (especially when the context is designed for these models as in many experiments) But it might be even simpler than these Asking participants, observing them, analysing narrative accounts are good places to start Downsides include: difficult to delineate scope of context, specificity of results Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 20

21. 2. Multi-context specification Specify N contexts, and for each of these a behavioural model (as in last slide) But people may consider the same situation in different mental contexts, e.g. a lecture as a dramatic performance vs. a lecture as a job interview Eliciting when people mentally flip between contexts is hard as this is largely unconscious But can be done by presenting examples to participants within contexts Also can involve an exponential effort in N Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 21

22. 3. Agents individually learning Context and within context behaviours Allow the agents to themselves learn the appropriate contexts along side learning the appropriate beliefs, language, habits, norms etc. within those contexts In other words to allow the agents to become individually acculturated Requires a model of context-dependent learning and reasoning etc. It takes time! Difficult for us (as researchers) might find it difficult to understand the culture that results, since we are not acculturated Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 22

23. Model Structure How the: context-identification system (CIS), the context-dependent memory (CDM), the local learning algorithm (LL), and Inference system (IS) could work together Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 23

24. 950 900 Volatility - past 5 periods 850 800 750 700 750 850 950 Volume - past 5 periods Snapshot of (most frequent) model domains in one trader Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 24

25. The (simplified) model contents in snapshot of one trader Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 25

26. Some Simulation Work addressing Context-Dependency in Simulations (Schlosser & al 2005) argue that reputation is context dependent (Edmonds & Norling 2007) looks at difference that context-dependent learning and reasoning in an artificial stock market (Andrighetto & al 2008) show context-dependent learning of norms is different form a generic method (Tykhonov & al 2008) aregue that trust is context dependent Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 26

27. Conclusion Generic models of how decisions are made are doomed, although one can pretend to oneself that the “variance” from a generic model is random (due to different decisions coming about in different individual mental contexts), this itself is an assumption with consequences One can (sometimes) use simple models for behaviour, but only within context A lot of “field work” needs to be done to identify strategies, habits, norms etc. within contexts A need for techniques to systematically and transparently analyse qualitative data to inform our models of within context behaviour Mundane Rationality, Bruce Edmonds, NESS@ECCS, Vienna, September 2011, slide 27

28. The End Bruce Edmonds http://bruce.edmonds.name Centre for Policy Modelling http://cfpm.org

29. Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 29 Comparison in an Artificial Stock Market Environment: Traders (n context, n not) 1 Market maker: prices and deals: 5 stocks Each fundamental (the interest given on owning stocks) changes by a slow random walk Traders buy and sell shares at current market price, but do not have to do so (there is simple cash too) Traders have memories, can observe actions of others, index, etc. Traders have a limited budget Modelling ‘arms-race’ Actions change environment

30. Agent Cognitive Model A 2D memory space of volatility vs. volume because these are associated with the “feel” of a market Current values of volatility and volume determine a radius of considered models, the current best (evaluated over a past period) is chosen and used to determine next action Compared to agents with a similar algorithm but a “point” memory space (all models equally accessible) Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 30

31. Agent models Rich language of models for their expectations of future prices Including those that enable chartist, fundamentalist, personal imitation, calculations on past prices, averages, own last actions etc. Agents decide what to do, based on projections using their current best model, their budget, transaction costs, fundamental, actions of others etc. Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 31

32. The primitives allowed in models AND, averageDoneByLast, averageIndexOverLast, averageOccuredToStockLast, averageSaidByLast, boundedByMaxPrice, divide, dividendOf, doneByLast, F, greaterThan, IBoughtLastTime, IDidLastTime, indexLag, indexLastTime, indexNow, indexTrendOverLast, ISaidLastTime, ISoldLastTime, lagBoolean, lagNumeric, lastBoolean, lastNumeric, lessThan, maxHistoricalPrice, minus, myMoney, NOT, onAvIBoughtLastTime, onAvISoldLastTime, OR, plus, presentStockOf, priceDownOf, priceLastWeek, priceNow, priceUpOf, randomBoolean, randomIntegerUpTo, randomPrediction, saidByLast, T, times, totalStockValue, volumeLastTime; F, indexLastTime, indexNow, maxHistoricalPrice, myMoney, onAvIBoughtLastTime, onAvISoldLastTime, randomBoolean, randomPrediction, T, totalStockValue, volumeLastTimeplus: the names of the traders, stocks and a random selection of constants Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 32

33. Model Structure How the: context-identification system (CIS), the context-dependent memory (CDM), the local learning algorithm (LL), and Inference system (IS) could work together Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 33

34. A CDM Learning and Update Algorithm Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 34 D 3.7 2.1 0.9 2.2 Some Space of Characteristics p

35. Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 35 Total Assets in a Single Run Black=context, White= non-context

36. Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 36 950 900 Volatility - past 5 periods 850 800 750 700 750 850 950 Volume - past 5 periods Snapshot of model domains in one trader

37. Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 37 The (simplified) model contents in snapshot of one trader

38. Conclusion of Example In the stock market example, nothing always works better, since other agents adapt to any winning strategy by a few The advantages of embedding or not-embedding are mixed here but contexts: recognised market “moods” did co-develop in certain periods There was a complex “lock-in” between the individual abilities and the organisation, one not easily predicted before experimentation Taking inspiration here from an observed system for how to program agents and how they relate for that system Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 38

39. About the model 1D space for trait (or location) with tolerance following Riolo et al. (2001) Nature, 411:441-443 2 essential foodstuffs, each needs learning to extract via matching a pattern with a model Individuals adapt their models (one for each foodstuff) that allows them to try and extract each foodstuff Share food and models with those within their tolerance Food if they have excess Model if (a) their model is fitter or (b) they are older Depending on nutrition levels they can reproduce (with possible mutation) die etc. Two kinds of model – suitable fuzzy model or unsuitable exact expression Derived from a model of symbiosis/specialisation (Edmonds 2006) Evolutionary Models of Information Transmission in Human Societies, Bruce Edmonds, Darwin09, UIB, Mallorca, Nov. 2009, slide 39

40. Traits with Tolerance Evolutionary Models of Information Transmission in Human Societies, Bruce Edmonds, Darwin09, UIB, Mallorca, Nov. 2009, slide 40

41. Exact, not forced to specialise, model acceptance on fitness Evolutionary Models of Information Transmission in Human Societies, Bruce Edmonds, Darwin09, UIB, Mallorca, Nov. 2009, slide 41

42. Exact, forced to specialise , model acceptance on fitness Evolutionary Models of Information Transmission in Human Societies, Bruce Edmonds, Darwin09, UIB, Mallorca, Nov. 2009, slide 42 At time 100 At time 100

43. Fuzzy, not forced to specialise, noisy transmission, model acceptance on fitness Evolutionary Models of Information Transmission in Human Societies, Bruce Edmonds, Darwin09, UIB, Mallorca, Nov. 2009, slide 43

44. Fuzzy, not forced to specialise, acceptance of models by age Evolutionary Models of Information Transmission in Human Societies, Bruce Edmonds, Darwin09, UIB, Mallorca, Nov. 2009, slide 44

45. Second example of learning models to predict heart disease Social Intelligence and Multi-Agent Systems, Bruce Edmonds, MALLOW 2010, Lyon, 31st August, slide 45 serum cholesterol resting blood pressure Only models with more than two instances shown