Fundamentals of Behavioral Economics: Role of Symmetry in Irrational Choice

Abstract

Symmetry is a fundamental concept in modern physics and other related sciences. Being such a powerful tool, almost all physical theories can be derived from symmetry, and the effectiveness of such an approach is astonishing. Since physicists do not actually believe that symmetry is a fundamental feature of nature, it seems more likely it is a fundamental feature of human cognition. According to evolutionary psychologists, humans have a sensory bias for symmetry. The unconscious quest for symmetrical patterns has developed as a solution to specific adaptive problems related to survival and reproduction. Therefore, it comes as no surprise that some fundamental concepts in behavioral economics necessarily involve symmetry. The purpose of this paper is to draw attention to the role of symmetry in decision-making and to illustrate how it can be algebraically operationalized through the use of mathematical group theory.