Why Most Things Fail: Evolution, Extinction and EconomicsWith the same originality and astuteness that marked his widely praised Butterfly Economics, Paul Ormerod now examines the “Iron Law of Failure” as it applies to business and government–and explains what can be done about it. “Failure is all around us,” asserts Ormerod. For every General Electric–still going strong after more than one hundred years–there are dozens of businesses like Central Leather, which was one of the world’s largest companies in 1912 but was liquidated in 1952. Ormerod debunks conventional economic theory–that the world economy ticks along in perfect equilibrium according to the best-laid plans of business and government–and delves into the reasons for the failure of brands, entire companies, and public policies. Inspired by recent advances in evolutionary theory and biology, Ormerod illuminates the ways in which companies and policy-setting sectors of government behave much like living organisms: unless they evolve, they die. But he also makes clear how desirable social and economic outcomes may be achieved when individuals, companies and governments adapt in response to the actual behavior and requirements of their customers and constituents. Why Most Things Fail is a fascinating and provocative study of a truth all too seldom acknowledged. |
Contents
1 | |
A Formula for Failure | 17 |
Up a Bit Then Down a Bit | 36 |
Making Sense of Segregation | 58 |
Playing by the Rules | 77 |
A Game of Chess | 100 |
The BestLaid Schemes | 118 |
Doves and Hawks | 140 |
Patterns in the Dark | 155 |
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ability able American average behave behaviour biological species bounded rationality cent chapter chess companies competition completely concept connections consumers context countries curve decades decision described dramatic economic theory economists empirical equilibrium evolution evolve example existence external extinction events extinction rate fail failure Figure firms fitness for survival fossil record game theory George Akerlof Gini Gini coefficient happens human impact income increase individual agents industry interactions marginal cost mathematical maximizing million move Nash Nash equilibrium Nobel Nobel Prize nomic observe outcome output particular patterns perfect competition period play players plot population power law Prisoner's Dilemma problem racial random rational reality relationship rules segregation shocks simply single social and economic species becoming extinct Stephen Jay Gould strategy success supply and demand theoretical tion twentieth century uncertainty unemployment whole words