Understanding Behavior Using First Principles

Abstract

"Why do systems behave the way they do?"

This thought-piece proposes a framework comprising mutually exclusive and exhaustive causal variables to answer this question. The framework applies to behavior of any entity in the universe - be it a quark, a proton, a cell, a plant, an animal, a human being, a nation, a planet, or even celestial dust.

The proposed general framework of systems behavior is then used to understand, analyze, and diagnose human behavior. It deals with the specific question, "Why do people behave the way they do". The behavior could be as routine as yawning, as mundane as scratching one’s head, as significant as falling in love, or as important as selecting bond A over stock B for investment. The framework captures the common underlying mechanics behind all human behavior.

Though the framework can be used to predict human behavior under certain circumstances; at the very least, it is a "how-to-think-about" tool for any anthropological behavioral event. Further, since human behavior lies at the core of every phenomenon in economics, business, society, organizations, or politics, it can be used to study behavior of entities such as countries, organizations, and societies. In this paper, for example, we discuss how to analyze if and when a country will go to war.

This paper is an output of deductive reasoning and thought experiments. It borrows intuition from interpretations of The Bhagwad Gita and the work of Ludwig von Mises.

Keywords: Psychology, behavior, human, economics, human resource management, systems, praxeology

JEL Classification: A10, D00, D11, D21, D7, D8, H7, J24