Complexity ==> Confusion and Dysfunction

/Complexity ==> Confusion and Dysfunction

Complexity ==> Confusion and Dysfunction

By | 2017-08-18T17:07:57+00:00 May 17th, 2013|Behavioral Finance|3 Comments

A heartwarming paragraph from a paper I’m reading:

Miller (1956) argued that there are definite limitations on the number of conceptual units that humans can handle at any one time. As the complexity of the information increases, effective use increases only to a point. Once complexity increases beyond this point, use of the information decreases in both quantity and quality, and behavior becomes confused and dysfunctional (Driver & Streufert, 1969; Jacoby, Speller, & Kohn, 1974; Miller, 1960).

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About the Author:

Wes Gray
After serving as a Captain in the United States Marine Corps, Dr. Gray earned a PhD, and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management that delivers affordable active exposures for tax-sensitive investors. Dr. Gray has published four books and a number of academic articles. Wes is a regular contributor to multiple industry outlets, to include the following: Wall Street Journal, Forbes,, and the CFA Institute. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.
  • Mike

    This is very true. I can clearly relate to this when I am programming complex systems with many moving parts. Visualizing how variables change and interact can be difficult when number of variables increase exponentially…