They pay 25 cents a minute for long-distance service they could buy for 9 cents. They invest in mutual funds with annual expense ratios of 2 percent when they could invest in better-performing funds with annual expenses of 0.3 percent. People believe in silly rumors, take advice from fake spiritualists, and some drink too much alcohol. Large numbers of people neglect their problem-solving skills. Only a tiny fraction of the adult population can use the Amtrak scheclule to find the latest train from Philadelphia that gets to Washington, D.C., before 5 p.m. Robert Axtell and Joshua Epstein base their work on the observation that a significant fraction of the population copies the decisions of others rather than solving problems from scratch.
Many people run their lives on the principle of imitation.
Rather than rethink every problem from first principles, they do what other people do. But specialization begins at an early stage. Probably no more than one adult in a thousand is able to set up a spreadsheet that correctly measures the amounts of postretirement consumption possible with different retirement ages and different amounts of preretirement saving. There is a grand piece of sociobiology to be carried out here. In organizations such as armies, indi- vidual problem solving is constrained.