Massimo Egidi was born (December 1, 1942) in Gassino Torinese (Turin) Italy. He is Professor of Economics at Luiss University in Rome and Rector of the University. With Axel Leijonhuvfud is co-director of CEEL, the Laboratory of Computable and Experimental Economics ( University of Trento). His main research interests are related to the study of boundedly rational behaviors in organizations and institutions. In particular, along the last ten years, most of his papers are related to the question of biases in decision making and in problem solving.
1967-1972 Research Fellow, Istituto Gemelli, Milan and Lecturer in Mathematical Economics, University of Trento.
1970-1976 Assistant Professor, Department of Mathematics, Politecnico di Torino (Turin Institute of Technology).
1976-1986 Associate Professor, Department of Economics, Faculty of Political Sciences, University of Torino.
1987 -2004 Professor of Economics atUniversity of Trento.1989-1995 Chairman of the Department of Economics.1996-2004 Rector of the University of Trento.2000- Member of Administrative Board of European University Foundation.2002-2004 Member of Board of CRUI (Conferenza Rettori Università Italiane) and member of EUA ( European University Association).
2005- Professor of Economics at Luiss University. Rector of the University
Selected Fellowships - Visiting Fellow University ofSt. Louis, (USA). Visiting Professor at Center for Research on Management at the Graduate Business School,University of California at Berkeley, (USA), 1993 at IIASA, Laxenburg, (Austria), 1994, at StanfordUniversity, (USA), 2003; at Santa Fe Institute, (USA), 1991,1995, 1998, 2003. - Member of “Italian Economic Society”, “European Economic Society”, and “European Association of Evolutionary Economics”.Associated Editor of Industrial and Corporate Change, History of Economic Ideas, European Journal of Economic and Social System, Mind&Society.
A summary of the recent research issues.
( papers downloadable at http://ideas.repec.org/e/peg2.html)
Experiments in problem solving (Egidi (1996), Egidi and Narduzzo (1997) Egidi and Bonini (1999)) suggest that biases in problem solving may result from the process of mental editing by which subjects produce an imperfect and incomplete “representation” of the decision problem. From these experiments, in fact, stable sub-optimal routinized behaviors in game playing emerged and offered clear evidence that individuals, having discovered the solution of a problem in a limited domain, try to make use of the same solution beyond the original domain.This phenomenon has been previously discovered in a particular setting by Luchins, and defined “mechanization of tought” ; individuals remain locked into the procedure they have learnt, without reacting to new instances of the problem even when a new and better solution is evidently available.The experiments on “mechanization of thought” suggest that if individuals extrapolate the solution of a problem beyond the domain of optimality, this happens because they have categorized the situation incompletely or imperfectly. They make, in fact, systematic use of default classifications in order to reduce the short-term memory load and the complexity of symbolic manipulation. The result is the construction of an imperfect mental representation of the problem that nevertheless has the advantage of being simple, and yielding “satisfying” decisions. There are many different ways to categorize and represent a problem.One well-known method of problem solving is to decompose a problem recursively into sub-problems that are simpler to be solved, until elementary solvable sub-problems are identified. It is important to note that a given problem may be decomposed in a large variety of different ways that imply also different levels of abstraction in the categorization of sub-problems. Every decomposition pattern is the result of a different way of codifying information at different levels of abstraction, and gives rise to a different strategy. For any given game or puzzle, we can compare the optimal decompositions of a problem with other decompositions, which are simpler and easier to be learnt, but sub-optimal. In Egidi (2001) “Biases in Organizational Behavior”, by analyzing in full details a specific puzzle, it is shown how biases emerge from the activity of problem decomposition and extrapolation. In the paper it is explained that individuals identify as building blocks of their representation sub-problems that do not coincide perfectly with an optimal decomposition. As consequence their categorization embodies sub-optimal rules for solving the problem.Biases, therefore, are explained as “cognitive traps” in which individuals may stay locked in consequence of the fact that they save on the mental activity required to build-up a new representation. The next question is the stability of sub-optimal representations (on this point see Egidi (2002) “Rethinking bounded rationality”): when a player faces a new game configuration that does not match with the system of abstract classifications he has previously built-up, he must either add this configuration as exception to his system of rules or revise entirely his representation. Obviously, changing representation implies a heavy mental task: individuals may prefer to maintain the old system, perhaps adding few exceptions, rather than devising new abstract rules, because the mental effort required to redefine a sub-problems is greater than that required to memorize an exception. If the number of “exceptions” grows too large, and if they systematically occur during the game, the players cannot simply continue to memorize new exceptions; they must instead restructure the space of the rules, re-codifying information. In other words, they must change the representation; a change which may be highly discontinuous because it generally entails de-structuring the division of problems and re-designing the problem with new building blocks. This is of course an extremely onerous mental task, so that it is likely that the new example will be treated as an anomaly, without prompting re-categorization of the problem. This aspect of the problem shows striking similarities with the process of scientific discovery. The paper Egidi (2002) Discrepancies: competing theories and ideologies as cognitive traps analyze some epistemological issues derived by the approach described so far. Finally, the interrelation between representation and decomposability is outlined in Egidi M., Marengo L., (2002) “Cognition, institutions, near decomposability: rethinking Herbert Simon’s contribution”, while the more general consequences in terms of organizational change are briefly discussed in Egidi M., (2001) “Biases in Organizational Behavior”.
Selected Recent Publications
Egidi( forthcoming 2011) “The cognitive explanation of economic behaviour : from Simon to Kahneman “ in Arena R. and Festré A. Knowledge and Beliefs in Economics. Aldershot: Edward Elgar.
Ajmone Marsan, Bellomo, Egidi (2008). Towards a mathematical theory of complex socio-economical system by functional subsystems representation. Kinetic and related Models , American Institute of Mathematical WSciences, p. 249-278, ISSN: 1937-5093
Egidi M (2007) The dual process account of reasoning: historical roots, problems and perspectives in B. Walliser Economie cognitive , Ophrys / Maison des Sciences de l’Homme, Paris.
Egidi M. (2008). De la racionalidad limitada a la economia comportamental. In: Viale R.. Las nuevas economias. p. 189-218, Mexico: Flacso, ISBN/ISSN: 978-970-9967-23-4.
Egidi M. (2008). Le processus dual du raisonnement: origines, problèmes et perspectives. In: Walliser B.. Economie et cognition. p. 11-54, Paris: Ophrys / Maison des Sciences de l’Homme,, ISBN/ISSN: 978-2-7080-1159-5.
Egidi M. (2008). Introduzione. In: Bonini N. , Del Missier F. , RumiatiR.. Psicologia del giudizio e della decisione. p. 10-14, Bologna: Il Mulino, ISBN/ISSN: 978-88-15-12600-9 .
Egidi, M. ,(2007) “Decomposition patterns in problem solving” , in Cognitive Economics: New Trends, Contributions to Economic Analysis, volume 280, Chapter 1, Part I, Decisions and Beliefs : edited by Richard Topol &Bernard Walliser, Elsevier.
Egidi, M.(2005) From Bounded Rationality to Behavioral Economics, Social Science Research Network, El. Paper Collection, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=758424 it vers. Egidi, M., (2005) “Dalla razionalità limitata all’economia comportamentale”. In Le Nuove Economie, Viale, R., editor. Milano, Edizioni il Sole 24 Ore.
Egidi, M., (2005) “Prefazione”. In Economia Cognitiva e Sperimentale, Guala, V., Motterlini, M., editors, Milano: Università Bocconi Editore.
Egidi, M., (2004) “Distorsioni nelle decisioni razionali”. In Rivista Italiana degli Economisti. Anno IX (1), 33-76.
Egidi, M., Rizzello, S., (2004) “Cognitive Economics: foundations and historical roots”. In Cognitive Economics, Egidi, M., Rizzello, S., editors. Aldershot U.K.: Elgar,1-22.
Egidi,M. (2005) “Errori e fallibilità” in Networks – rivista di filosofia dell’intelligenza artificiale e scienze cognitive , n 5 http://lgxserve.ciseca.uniba.it/lei/ai/networks/05-1/
Egidi, M., (2004) “Distorsioni nelle decisioni razionali”. In Rivista Italiana degli Economisti. (1), 33-76. Egidi, M., Marengo, L., (2004) “Cognition, institutions, near decomposability: rethinking Herbert Simon’s contribution”. In Models of A Man: Essays in Memory of Herbert A. Simon, Augier M., March J. J., editors, Part III: Modeling Systems, MIT Press.
Egidi, M., (2003) “Discrepancies: competing theories and ideologies as cognitive traps”. In, Cognitive Developments in Economics, Rizzello, S., editor,London: Routledge. Egidi,
M., (2001) “Biases in Organizational Behavior”. In The Economics of Choice, Change and Organization: Essays in Memory of Richard M. Cyert, Augier M., March J. J., editors,Aldershot: Elgar. 190-242.
Egidi, M., (2001) “Herbert Alexander Simon’s Contribution to the Sciences of Artificial”. In Proceedings EAPE 2001 Conference,
Siena, 8-11 Novembre 2001.
Egidi, M., (2000) “‘Bias’ cognitivi nelle organizzazioni”. In Sistemi intelligenti: rivista quadrimestrale di scienza cognitiva e intelligenza artificiale, Bologna: Il Mulino. (2) 237-269.
Bonini, N., Egidi, M., (1999) “Cognitive Traps in Individual and Organizational Behavior: some empirical evidence”. Revue d’economie industrielle. (88), 153-186.
Egidi, M., (1997) “Technological and organizational innovations as problem solving activities”. In Economic of Structural and Technological Change Antonelli, G., De Liso N., editors, London: Routledge.
Egidi, M., Ricottilli, M., (1997) “Coordination and Specialization as coevolutionary processes”. In Simulating Social Phenomena: Lectures Notes in Economics and Mathematical Systems, Conte, R., Hegselmann, R., Terna, P., editors, Springer-Verlag. (456), 345-64.
Egidi, M., (1997) “Comment: Adverse Selection within Organizations”. In Simon, H. A.: An Empirically Based Microeconomics, Raffaele Mattioli Lectures.Cambridge University Press. 111-132.
Egidi, M.; Narduzzo, A., (1997) “The Emergence of Path Dependent Behaviors in Cooperative Contexts”. In International Journal of Industrial Organization. 15(6), 677-709.
Egidi, M., Cohen, M., Burkhart, R., Dosi, G., Marengo, L., Warglien, M., Winter, S., (1996) “Routines and Other Recurring Action Patterns of Organizations: Contemporary Research Issues”. In Industrial and Corporate Change, Glascow:Oxford University Press. 5(3), 653-98.
Egidi, M.,(1996) “ ‘Creative Destruction’ in Economic and Political Institutions”. In: Economic institutions, markets and competition: Centralization and decentralization in the transformation of economic systems, Dallago, B.; Mittone, L., editors,Cheltenham, U.K.:Elgar. 33-62.
Egidi, M., (1996) “Routines, Hierarchies of Problems, Procedural Behaviour: Some Evidence from Experiments”. In: The rational foundations of economic behaviour Arrow, Kenneth J., et al., editors, St. New York: Martin’s Press,London: Macmillan Press, in association with the International Economic Association. (114), 303-33.
Egidi, M.; Messori, M., (1995) “Teoria economica e Teoria dell’Organizzazione”. In Relazioni pericolose – L’avventura dell’economia nella cultura contemporanea, Rodano, editor, Bari: Laterza. Egidi, M., Marengo, L., (1995) “Division of Labour and Social Coordination Modes”. In Artificial Societies: the computer simulation of social life, Nigel Gilbert, N., Conte, R., editors, London: UCL press. Vol.XIII.
Egidi, M., (1994) “Prospettive per l’Economia”. In Le Ragioni delle Organizzazioni Economiche, Egidi, M., Turvani, M., editors, Torino: Rosemberg e Sellier. Egidi, M., (1994) “Mercato e democrazia: il processo di distruzione creatrice: introduzione”. In Schumpeter: Capitalismo Socialismo e Democrazia, Milano: Etas.
Egidi, M., (1992) “Il Dilemma As If”. In Sistemi intelligenti: rivista quadrimestrale di scienza cognitiva e intelligenza artificiale, Bologna: Il Mulino. (3).
Egidi, M., (1992) “Organizational Learning, Problem Solving and the Division of Labour”. In Economics, bounded rationality and the cognitive revolution, Simon, H.A., Egidi, M., Marris, R., and Viale, R., editors,Aldershot, U.K.: Elgar, 148-73.
Dosi, G., Egidi, M., (1991) “Substantive and Procedural Uncertainty: An Exploration of Economic Behaviours in Changing Environments”. In Journal of Evolutionary Economics. 1(2), 145-68.