Complex Decision-Making in Economy and Finance

17How to Manage Crises?

Far from wishing to resume talking about a set of specific skills, managing crises calls for a favorable capacity of the entire organization, both in space and over time, this chapter wraps up and discusses a number of fitting conditions from experience.

17.1. The fundamental principles of crisis management

Most economists assume that changes in financial markets are the result of chance or irrational behavior. Moreover, with the consequences that we know, in particular, at the stock exchange level. According to André Orléan [ORL 99] (and this hypothesis is in line with the case we have just studied concerning computer failures or failures in electronic circuits), the root causes of disturbances are only rarely independent. Indeed, they are always dynamic systems in which the actors or agents or disturbance factors interact. These interactions, as in neural networks, will be expressed with more or less force (called synaptic activity rate). For example:

• – on the stock market, speculative bubbles can exist without irrationality on the part of agents. They result from a general belief in the rise in future stock market prices and are combined with population movements. Similarly, when analyzing failures in large electronic systems, a similar procedure is used: (lower) belief coefficients are assigned to families of questionable components, which effectively increases the probability of failures due to these components to a much higher rate than that ...