Les crashs sont rationnels

TL;DR

This paper demonstrates that crashes and escalations in economic systems are rational outcomes in infinite game models, challenging traditional views of stability and suggesting new methodological approaches like coinduction.

Contribution

It introduces a framework using infinite game theory and coinduction to explain why crashes are rational, offering a novel perspective on economic instability.

Findings

Crashes are rational in infinite game models.

Equilibrium does not imply stability in economic systems.

Coinduction is a key reasoning tool for infinite games.

Abstract

As we show by using notions of equilibrium in infinite sequential games, crashes or financial escalations are rational for economic or environmental agents, who have a vision of an infinite world. This contradicts a picture of a self-regulating, wise and pacific economic world. In other words, in this context, equilibrium is not synonymous of stability. We try to draw, from this statement, methodological consequences and new ways of thinking, especially in economic game theory. Among those new paths, coinduction is the basis of our reasoning in infinite games.