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Random Riches - Hermann RAUCHENSCHWANDTNER

The Poker Face: Masquerade, Games and the Financial Crisis

This paper discusses the recent approach of pokernomics. I investigate the linkage between homo economicus (degree of utility) and homo ludens (degree of belief, bet your belief) on the one hand, between rationality and subjective probability on the other hand. The paper therefore analyses the poker face's rationality: Is the poker face a homo economicus embodying the homo ludens in its purest form or a con man, a pretender (Derman)? Which type of player implements which move in pokernomics?

Further : Are we concerned with merely abstracting models which do not performatively implement the world as a world of chance? Is Pokernomics a sophistry because "method without content leads to sophistry" (Derman)? Is criticism of sophistry not a move in the con game? Therefore, the games played in Pokernomics have to be elucidated.

Lastly, the macroeconomic perspective on financial markets will be discussed. They find themselves in danger of being drawn into the performative maelstrom of Pokernomics, resulting in the existence of one single strategic game of life where everybody is everbody's opponent and an agon or struggle becomes more than just a game.

Hermann RAUCHENSCHWANDTNER
is an economist and philosopher. Currently he is Head of Business Development & Economics at the Salzburg University of Applied Sciences.