In The New Yorker, John Cassidy lucidly rehearses the core game theoretic model of economic crisis:
… deciding whether to invest in financial assets or any other form of capital can be viewed as a huge n-person game (one involving more than two participants), in which there are two options: trust in a good outcome, which will lead you to make the investment, or defect from the game and sit on your money. If you don’t have a firm idea about what is going to happen and the payoffs are extremely uncertain, the optimal strategy may well be to defect rather than to trust. And if everybody defects, bad things result.
Does anybody seriously expect honesty from the status quo within this context? ‘Optimism’ is a fundamental building-block of regime stability. Expect it to be very carefully nurtured, with whatever epistemological flexibility is found helpful.
(Stay to the end of the article for the ominous nonlinear dynamics that correspond to narrative dike-breaking.)