Applying spreadsheet maths to consumer behaviour is folly

Rory Sutherland
OgilvyOne

Any system that relies on feedback loops – such as consumer behaviour – is invariably too complex to be reduced to simple numerical values.

Max Planck, the German theoretical physicist, had a friend who was an economist. "Why don't you turn your mind to economics, Max?" the friend once asked. "I couldn't," he replied. "The maths is too difficult."

This is a rather surprising answer. Planck was the father of quantum theory and a mathematician of rare genius. As one contemporary economist remarked, he could have mastered all the mathematical theory in conventional economics in a couple of days. While juggling and playing the piano. So what could he possibly have meant by "too difficult"?

What Planck realised, which many economists still don't, is that there is a degree of complexity to human behaviour, and therefore economics, that simply does not allow for simple mathematical models, In any system where feedback applies, you enter a completely new level of maths.