Markets act as cognitive prostheses enabling outcomes beyond individual rationality

Evidence

Indeed, markets themselves can be seen as prostheses in the sense that they enable human beings to achieve outcomes that go beyond their individual cognitive grasp. … The classic examples are the demonstrations that when placed in a double-auction market akin in its structure to open-outcry trading, both untutored human beings and even computerized “zero-intelligence traders” submitting “random bids and offers” achieve economic outcomes close to those predicted by theories that posit fully rational economic actors (Smith 1991; Gode and Sunder 1993, p. 119). — Donald MacKenzie, An Engine, Not a Camera, 1206

Categorization

• XREF: Connects to Mirowski’s Machine Dreams and the broader performativity literature the reader is already addressing; Gode and Sunder’s zero-intelligence traders are foundational to market-as-computation arguments. — connects to: Economic action as distributed cognition is what makes embedded theory genuinely performative. — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 200; Studying performativity forces attention to the very market objects economics analyzes. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 101; Human cognitive limits make simplifying concepts and calculating devices constitutive of complex markets. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1195 (+6 more)

Broader Connections

• Market mechanisms sometimes amplify rather than correct human cognitive limitations #qualifies (0.85) — Donald MacKenzie, An Engine, Not a Camera, 1207
• A market model can shape markets actively rather than merely describing them #corroborates (0.75) — Donald MacKenzie, An Engine, Not a Camera, 1165
• Data colonialism fuses economic and cognitive power in an order as durable as capitalism #expands (0.72) — Nick Couldry & Ulises A. Mejias, The Costs of Connection, 30