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Emerald | Management Decision | Complexity and variety in mass customization systems: analysis and recommendations

Emerald | Management Decision | Complexity and variety in mass customization systems: analysis and recommendations | Bounded Rationality and Beyond | Scoop.it

Purpose – To identify and examine the origins of complexity in a mass customization system and to propose an effective application sequence of variety management strategies in order to cope with this complexity.


Via Gianluca Biotto
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The Neuroscience of Fairness and Injustice

The Neuroscience of Fairness and Injustice | Bounded Rationality and Beyond | Scoop.it
How Our Brains Are Wired to Resist Unfair Treatment

Humans are inherently social beings. We care not only about material and financial rewards, but also about social status, belonging, and respect. Research studies show that our brains automatically evaluate the fairness of how financial rewards are distributed. We seem to have a happiness response to fair treatment and a disgust or protest response to unfairness. Thisbrain wiring has implications for life happiness, relationship satisfaction, raising kids, and organizational leadership.  This article will examine how we define fairness, how your brain processes experiences of fairness and unfairness, and how to cope with life’s unfair moments..

 
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Eli Levine's curator insight, Today, 6:37 AM

An addendum to this should be that we resist what we each and all define as injustice, unfairness, and tyranny.  The definition of these things are objectively subjective, which is how we get differences of opinion and belief.  However, there are some things that are common to us all, and one has to wonder at the definitions of some other people, as to whether or not their definitions match up with what the collective actually is feeling.

 

For example, conservatives and Libertarians can be living in absolute poverty, and think it unfair that richer people be taxed more to help raise them out of poverty.  Economically, it's impossible to lift oneself up by your own bootstraps alone, without someone providing you boots to do so.  You can't get something from nothing, and that's what some conservatives and Libertarians have.  So, not only are they incorrect about how the economy works, but they're also advocating policy that many more of us would find unjust and unfair when phrased explicitly and honestly to the public.  You can change people's stated opinions through manipulation of the question phrases.  However, you usually can't and don't change the deep, complicated sentiments that most people have without having some kind of "aha" moment that is endogenous to themselves.  Enlightenment is not a gift that can be given.  It has to be produced from within you based on your actions, attitudes, behaviors, and experiences.

 

Therefore, it is primarily through this confusion of fact and manipulation of phrasing, ignorance, and plain callousness that we get differing opinions as to what fair is in many cases.  Some variety is ok.  However, the extremes of difference that we're experiencing do not reflect the common reality in which we are living.  The actual consequences that are realized from the conservative and Libertarian approach would not be supported by the majority opinion (when asked honestly and explicitly) because most of us have a different and more accurate understanding of fairness.  Quite frankly, I don't know how it is that we spend so much time caught up with individuals who don't know, don't care to know, and refuse to accept the common reality around them for the sake of a presupposed, manufactured and highly inaccurate perception of the world, with the unworkable and unjust opinions and conclusions that follow from their distorted view of the world.  It's time that we ideologically ditch all ideologies, ideologues, and people whose opinions don't match the common reality; people who refuse to accept the common reality, even when it is clearly presented to them.  They will get us killed, in the long term, because they are like bats who do not have properly functioning echo location senses.  They will fly us all into trees, into water, into the ground, or into some hungry predator's mouth, because they've presupposed the reality and are dug into those presuppositions, rather than attentive to the reality itself that is around them.

 

I don't want to die because of these people.  Do you?

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It's the effect size - Decision Science News

It's the effect size - Decision Science News | Bounded Rationality and Beyond | Scoop.it
Enter the concept of effect size. Effect size gives one a way to think about how large an effect (e.g. a height difference) is, not just the probability of the data given the null hypothesis.

Social science research puts the p-value on a pedestal. The p value, or probability of the data given the null hypothesis is true, is seen as the gateway to publication, giving authors an incentive to “p hack“, or use various tricks to get p-values down below .05. And they do this despite the lord loving the .06 as much as the .05. We have cartooned on this before: One gripe with the p-value is that statistical significance is cheap. Most plausible hypotheses become statistically significant when the sample size is large enough. Among other things, statistical significance is a function of sample size. In the age of mTurk-scale data, attaining statistical significance is easier than ever. We have heard it said that that if you draw a line anywhere through the belly of the United States, you’ll find a significant different in height on opposite sides of the line because of the massive sample size. But it may be a puny difference.

Enter the concept of effect size. Effect size gives one a way to think about the magnitude of effects, not just the probability of the data given the null hypothesis (aka, the p-value). One popular measure of effect size, Cohen’s D, is discussed along with in the beautiful visualization pictured above. Learn more from the article It’s The Effect Size, Stupid, from which this post gets its name. And learn why you need lots of data to estimate effect sizesfrom our friends at Data Colada.

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Why You Shouldn't Trust Malcolm Gladwell |Opinion | The Harvard Crimson

Why You Shouldn't Trust Malcolm Gladwell |Opinion | The Harvard Crimson | Bounded Rationality and Beyond | Scoop.it
Behavioral Economist

When I tell other students here that I plan to study behavioral economics, one of the first things they say to me is, "Have you heard of Malcolm Gladwell?"  And usually I respond, "How could I not have heard of him?"  He has entrenched himself as one of the most recognizable authors in recent memory.  His popularity and perceived know-how have allowed him to command $45,000 in speaking fees per appearance, most notably at Bank of America (and if you were wondering how BOA has been doing recently...).  He was also given an award  by the American Sociological Association for his excellence in "disseminating sociological research," so academics have endorsed him as well.

Certainly, I have read many of his books at the recommendation of many peers.  Just like they said, most of his work centers around topics in social psychology, a key component in many business and economic threads.  I have found his books to be well written; mesmerizing at times, as he skillfully and effortlessly glides from topic to topic, story to story.  His writing style is unique and captivating.  Unfortunately, rather than nonfiction, professional, business-level books, I have found his writings to be full of simple stories that do nothing more than stir up a generalized interest and allow the author to engage in vague theorizing.  

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De-jargoned: Behavioral economics

De-jargoned: Behavioral economics | Bounded Rationality and Beyond | Scoop.it

It is a combination of psychology and economics which looks into economic decision-making.If human beings were rational decision makers, as assumed in standard economics literature, the functioning of financial markets would have been a lot smoother than it actually is. If investors always behaved rationally, then they would have only bought assets that are undervalued and sold whenever prices went above the fair value. As a result, over time, all assets would have been priced to perfection and we would not have faced boom and bust cycles in the financial market. However, they are a regular feature and studies in behavioural economics show that people do not always act rationally. In an article on behavioural economics, Harvard Magazine has put this aptly. “Economic Man makes logical, rational, self-interested decisions that weigh costs against benefits and maximize value and profit to himself. Economic Man is an intelligent, analytic, selfish creature who has perfect self-regulation in pursuit of his future goals and is unswayed by bodily states and feelings… But Economic Man has one fatal flaw: he does not exist.” (See: The Marketplace of Perceptions, March-April 2006.) What is behavioural economics? It can be defined as a combination of psychology and economics which looks into the economic decision-making of individuals. It has been found that human behaviour is not always rational as previously perceived. Human beings have limited ability to process information and take mental shortcuts (also known as heuristics) to arrive at a decision. There are also cognitive biases that affect decisions.

Read more at: http://www.livemint.com/Money/13HCccztL5dNvip08Lq2pL/Dejargoned-Behavioral-economics.html?utm_source=copy

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This Is Your Brain on Silence - Issue 16: Nothingness - Nautilus

This Is Your Brain on Silence - Issue 16: Nothingness - Nautilus | Bounded Rationality and Beyond | Scoop.it

One icy night in March 2010, 100 marketing experts piled into the Sea Horse Restaurant in Helsinki, with the modest goal of making a remote and medium-sized country a world-famous tourist destination. The problem was that Finland was known as a rather quiet country, and since 2008, the Country Brand Delegation had been looking for a national brand that would make some noise.

Over drinks at the Sea Horse, the experts puzzled over the various strengths of their nation. Here was a country with exceptional teachers, an abundance of wild berries and mushrooms, and a vibrant cultural capital the size of Nashville, Tennessee. These things fell a bit short of a compelling national identity. Someone jokingly suggested that nudity could be named a national theme—it would emphasize the honesty of Finns. Someone else, less jokingly, proposed that perhaps quiet wasn’t such a bad thing. That got them thinking.

A few months later, the delegation issued a slick “Country Brand Report.” It highlighted a host of marketable themes, including Finland’s renowned educational system and school of functional design. One key theme was brand new: silence. As the report explained, modern society often seems intolerably loud and busy. “Silence is a resource,” it said. It could be marketed just like clean water or wild mushrooms. “In the future, people will be prepared to pay for the experience of silence.”

 

 

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Can musical training influence brain connectivity? Evidence from diffusion tensor MRI

Can musical training influence brain connectivity? Evidence from diffusion tensor MRI | Bounded Rationality and Beyond | Scoop.it

“In recent years, musicians have been increasingly recruited to investigate grey and white matter neuroplasticity induced by skill acquisition. The development of Diffusion Tensor Magnetic Resonance Imaging (DT-MRI) has allowed more detailed investigation of white matter connections within the brain, addressing questions about the effect of musical training on connectivity between specific brain regions. Here, current DT-MRI analysis techniques are discussed and the available evidence from DT-MRI studies into differences in white matter architecture between musicians and non-musicians is reviewed. Collectively, the existing literature tends to support the hypothesis that musical training can induce changes in cross-hemispheric connections, with significant differences frequently reported in various regions of the corpus callosum of musicians compared with non-musicians. However, differences found in intra-hemispheric fibres have not always been replicated, while findings regarding the internal capsule and corticospinal tracts appear to be contradictory. There is also recent evidence to suggest that variances in white matter structure in non-musicians may correlate with their ability to learn musical skills, offering an alternative explanation for the structural differences observed between musicians and non-musicians. Considering the inconsistencies in the current literature, possible reasons for conflicting results are offered, along with suggestions for future research in this area.”

 
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Il recettore che accomuna creatività e follia - Le Scienze

Il recettore che accomuna creatività e follia - Le Scienze | Bounded Rationality and Beyond | Scoop.it
Genio e follia: questo binomio spesso abusato pare però abbia perfino una sia pur parziale radice biologica. L'accostamento fatto da una recente ricerca non riguarda tanto la eventuale sregolatezza del grande talento, ma la capacità di creare associazioni d'idee insolite, che nel caso del genio sono creative. 

La creatività può essere definita come la capacità di produrre un lavoro che sia allo stesso tempo nuovo e significativo, opposto cioè tanto al banale quanto alla semplice bizzarria. Per valutare le differenze individuali nella creatività si ricorre ai test per il pensiero divergente, che in genere richiedono di trovare risposte nuove e sensate alle situazioni problematiche proposte. 

La creatività appare peraltro correlata ad alcuni tratti della personalità, come l'apertura alle esperienze; inoltre è stato osservato che le persone altamente creative appartengono più spesso a famiglie in cui qualche membro ha sofferto di disturbi mentali. 
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What Drives Innovation? A Heuristic Framework for Corporate Innovation Article

What Drives Innovation? A Heuristic Framework for Corporate Innovation Article | Bounded Rationality and Beyond | Scoop.it

If you ask, “what drives successful innovation?” you are likely to get these answers: “Desire for growth.” “Demand for increased profitability.” “People.”

While clearly true, these are superficial answers. There’s no clear way to link these answers to the factors that would lead to success in innovation – or the factors that lead to failure. Innovation is still regarded as somewhat uncontrollable and mysterious, though this perception is beginning to change. The idea that there are factors that, singly and in combination, drive innovation (successful innovation in particular) has just begun to be discussed. An effort to understand innovation drivers – those factors that motivate and shape innovation efforts, and in no small way determine their success or failure – seemed to us to be a promising way to discover what factors make for success and failure in innovation.

We interviewed a number of executives from across a wide range of industries, who either were or had been responsible for innovation efforts throughout their careers. Our goal was to find common innovation drivers that could be linked to successes and failures.

During the course of collecting nearly twenty highly diverse innovation stories, we realized these executives were telling us about something much more actionable than drivers. They told us about:

Questions that were asked and were not asked.Issues that were addressed and not addressed.Decisions that were and were not made.Information that strongly impacted the innovation effort, but was discovered too late to alter the effort.

Ultimately, their stories pointed out that it was these things, rather than the initial driver behind the innovation, that led either to a successful or to a failed innovation. We refer to these critical things as “lynchpin drivers.”

 #Heuristic #Framework
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Investment Decisions: Are we fully-Rational?

Abstract

 

The purpose of this paper is to understand the reasons behind financial market behavior that often does not match that proposed by classic finance models. In particular, this work tests the fully-rational agents assumption made by classic finance to explain investment decisions under uncertainty. Many issues claim for a better alternative explanation to classic finance, regarding how and why of the financial market behavior changes. Among these issues, we may highlight: housing bubbles, financial crisis, excess of volatility, high heterogeneity in analyst forecasts, and a large amount of speculators looking for the “holy grail” to profit from the market. In order to answer the question, this paper has selected the most salient financial market anomalies, such as, the Closed-end fund mispricing and the Excess Volatility in stock markets. The purpose is to test by a thorough review of empirical works existent in the literature the assumption of fully-rationality in investment decisions. Subsequently, it goes deeper into trying to understand the way people – and investors – make decisions under uncertainty. A relevant and very popular bias is Overconfidence which is deeply analyzed, as well as the highly observed tendency among traders to let losing positions run while cutting winners too early (the Disposition Effect). For the latter, this study provides support on the theory of prospects and the Mental Accounting bias. Finally, the research focuses on unconscious mental strategies that people use to evaluate the likelihood of events, as well as the value of assets in a quick and low-cost way: Availability and Anchoring heuristics. The main findings of this research are that a) Markets are not efficient always; b) People are quasi-rational; hence the assumption of full-rationality is not realistic to interpret and forecast financial markets; and c) There is a deep ocean of cognitive factors in every individual and most of the time those are present in financial decision making, thus affecting the optimal output of their estimations and solutions to problems under uncertainty. #neuroeconomy 

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Private provision of a public good: cooperation and altruism of internet forum users - Munich Personal RePEc Archive

Private provision of a public good: cooperation and altruism of internet forum users - Munich Personal RePEc Archive | Bounded Rationality and Beyond | Scoop.it

Abstract: We run an experiment with users of internet message boards. We find that forum users cooperate more with partners of their own forum than with partners from a different forum but they are equally altruistic when they made a gift to a partner of their forum or from another one. We also find that individuals are more active in the forums, the more altruistic they are; however, we find no relation between activity in the forum and cooperation. These results suggest that the public good provided in internet forums is mainly provided by a group of unconditional altruistic group of users, and that the feeling of community supports the cooperation in that provision.

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Why We Procrastinate - Issue 16: Nothingness - Nautilus

Why We Procrastinate - Issue 16: Nothingness - Nautilus | Bounded Rationality and Beyond | Scoop.it

British philosopher Derek Parfit espoused a severely reductionist view of personal identity in his seminal book, Reasons and Persons: It does not exist, at least not in the way we usually consider it. We humans, Parfit argued, are not a consistent identity moving through time, but a chain of successive selves, each tangentially linked to, and yet distinct from, the previous and subsequent ones. The boy who begins to smoke despite knowing that he may suffer from the habit decades later should not be judged harshly: “This boy does not identify with his future self,” Parfit wrote. “His attitude towards this future self is in some ways like his attitude to other people.”

Parfit’s view was controversial even among philosophers. But psychologists are beginning to understand that it may accurately describe our attitudes towards our own decision-making: It turns out that we see our future selves as strangers. Though we will inevitably share their fates, the people we will become in a decade, quarter century, or more, are unknown to us. This impedes our ability to make good choices on their—which of course is our own—behalf. That bright, shiny New Year’s resolution? If you feel perfectly justified in breaking it, it may be because it feels like it was a promise someone else made.

 

 

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Revealed: The Type of Music That Makes You Feel Most Powerful — PsyBlog

Revealed: The Type of Music That Makes You Feel Most Powerful — PsyBlog | Bounded Rationality and Beyond | Scoop.it
Abstract

Music has long been suggested to be a way to make people feel powerful. The current research investigated whether music can evoke a sense of power and produce power-related cognition and behavior. Initial pretests identified musical selections that generated subjective feelings of power. Experiment 1 found that music pretested to be powerful implicitly activated the construct of power in listeners. Experiments 2–4 demonstrated that power-inducing music produced three known important downstream consequences of power: abstract thinking, illusory control, and moving first. Experiments 5a and 5b held all features of music constant except for the level of bass and found that music with more bass increased participants' sense of power. This research expands our understanding of music’s influence on cognition and behavior and uncovers a novel antecedent of the sense of power.

http://spp.sagepub.com/content/early/2014/07/11/1948550614542345

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Postcards From the Edge of Consciousness - Issue 16: Nothingness - Nautilus

Postcards From the Edge of Consciousness - Issue 16: Nothingness - Nautilus | Bounded Rationality and Beyond | Scoop.it

Research suggests that something rather remarkable happens when sensory stimulus from the external world is reduced to nearly nothing. REST, or Restricted Environmental Stimulation Therapy, as floating and the related dry chamber methods are known to researchers, has been shown to slow the heartbeat, reduce blood pressure, and release muscle tension. It increases levels of endorphins and lowers levels of adrenaline, as well as stress hormones such as cortisol. Some of these effects can be measured across sessions. Cortisol levels, for example, tend to go down after the first session, then go down further and stay down after repeated sessions. Clinically, REST has been shown to help with tension headaches, hypertension, and chronic pain, as well as performance enhancement. Basketball players, tennis players, dart players, skiers, and pilots all perform better after REST. Scores on memory and cognition tests improve. Some subjects report powerful emotional experiences, as in a particularly intense session of psychotherapy, and nearly all subjects report greater relaxation and an elevated mood after floating.

 
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It's the effect size, stupid: what effect size is and why it is important

Abstract

Effect size is a simple way of quantifying the difference between two groups that has many advantages over the use of tests of statistical significance alone. Effect size emphasises the size of the difference rather than confounding this with sample size. However, primary reports rarely mention effect sizes and few textbooks, research methods courses or computer packages address the concept. This paper provides an explication of what an effect size is, how it is calculated and how it can be interpreted. The relationship between effect size and statistical significance is discussed and the use of confidence intervals for the latter outlined. Some advantages and dangers of using effect sizes in meta-analysis are discussed and other problems with the use of effect sizes are raised. A number of alternative measures of effect size are described. Finally, advice on the use of effect sizes is summarised.

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Herbert Simon’s Silent Revolution

 Abstract

Simon’s bounded rationality (BR), the first scientific research

program (as opposed to a purely philosophical one) to seriously

take the cognitive limitations of decision makers into

account, has often been conflated with his more restricted

concept of satisficing—choosing an alternative that meets or

exceeds specified criteria, but that is not guaranteed to be

unique or in any sense “the best.” Proponents of optimization

often dismiss bounded rationality out of hand with the following

“hallway syllogism” (as formulated by Bendor 2003:

435, who disagrees with it): bounded rationality “boils down

to” satisficing; satisficing is “simply” a theory of search for

alternatives that takes into account the costs of computation.

Hence, bounded rationality is “just a minor tweak” on optimal

search theory.

This article complements a psychologist’s plea for “striking

a blow for sanity” in theories of rationality (Gigerenzer

2004). I amplify his argument that bounded rationality is not

optimization under constraints from a more biological perspective.

In order to do so, I first call attention to Simon’s

evolutionary understanding of the nature of bounded rationality

as grounded in the interactions between organisms and their

environments, which has implications for niche construction

and evolutionary theory generally. I then discuss the debate

between “optimizers” and “satisficers” with particular attention

tomodeling in biology. I round off by briefly assessing the

relevance of a ramification of bounded rationality, the neardecomposability

of hierarchical systems, for modular theory,

which predicts that hierarchical developmental processes generate

hierarchical phenotypic units that can change independently.

Interspersed are some remarks on Simon’s philosophical

views.

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I'm Dan Ariely, Author and Professor, and This Is How I Work

I'm Dan Ariely, Author and Professor, and This Is How I Work | Bounded Rationality and Beyond | Scoop.it
Smart people sometimes do dumb things. Why is that? You may want to ask Dan Ariely, a professor of psychology and behavioral economics who has made a name for himself by studying why we often behave irrationally.
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Joseph T. Hallinan’s ‘Kidding Ourselves,’ and More

Joseph T. Hallinan’s ‘Kidding Ourselves,’ and More | Bounded Rationality and Beyond | Scoop.it
In 1982, something disturbing began happening to men in northeastern India: Their penises started to shrink. And no amount of physical evidence could convince the unfortunate sufferers otherwise. “Penis panics” — turns out, they’re far from rare — are one of the more striking examples of the general principle behind Hallinan’s fascinating new book, “Kidding Ourselves,” an exploration of our mind’s ability to conjure its own reality. “The things we believe in may be imaginary,” Hallinan writes, “but the results they produce can be real.” He sometimes fuses shaky science with legitimate findings (the implicit-egotism effect, for instance, which argues you’re more likely to marry someone with a similar name because you’re subconsciously drawn to someone who somehow resembles you, has been largely discredited; and no student of behavioral economics would ever hold the stock market as a “citadel of rationality”), and other times flits too rapidly from vignette to vignette, yet such lapses are rare. More frequently, he entertains and provokes in equal measure. And his point is an important one: Our mind is a powerful thing.
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Using our practical wisdom

Using our practical wisdom | Bounded Rationality and Beyond | Scoop.it

In an intimate talk, Barry Schwartz dives into the question "How do we do the right thing?" With help from collaborator Kenneth Sharpe, he shares stories that illustrate the difference between following the rules and truly choosing wisely. 

" ....... Rules and incentives don't tell you how to be a good friend, how to be a good parent, how to be a good spouse, or how to be a good doctor or a good lawyer or a good teacher. Rules and incentives are no substitutes for wisdom. Indeed, we argue, there is no substitute for wisdom. And so practical wisdom does not require heroic acts of self-sacrifice on the part of practitioners. In giving us the will and the skill to do the right thing -- to do right by others --practical wisdom also gives us the will and the skill to do right by ourselves...."

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Behavioral Dimensions of Contests - Munich Personal RePEc Archive

Behavioral Dimensions of Contests - Munich Personal RePEc Archive | Bounded Rationality and Beyond | Scoop.it
Abstract

 

The standard theoretical description of rent-seeking contests is that of rational individuals or groups engaging in socially inefficient behavior by exerting costly effort. Experimental studies find that the actual efforts of participants are significantly higher than predicted in the models based on rational behavior and that over-dissipation of rents (or overbidding or over-expenditure of resources) can occur. Although over-dissipation cannot be explained by the standard rational-behavior theory, it can be explained by incorporating behavioral dimensions into the standard model, such as (1) the utility of winning, (2) relative payoff maximization, (3) bounded rationality, and (4) judgmental biases. These explanations are not exhaustive but provide a coherent picture of important behavioral dimensions to be considered when studying rent-seeking behavior in theory and in practice.

 

 

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Neurobiology of Social Behavior, 1st Edition | Michael Numan | ISBN 9780124160408

Neurobiology of Social Behavior, 1st Edition | Michael Numan | ISBN 9780124160408 | Bounded Rationality and Beyond | Scoop.it
Description Social neuroscience is a rapidly growing, interdisciplinary field which is devoted to understanding how social behavior is regulated by the brain, and how such behaviors in turn influence brain and biology. Existing volumes either fail to take a neurobiological approach or focus on one particular type of behavior, so the field is ripe for a comprehensive reference which draws cross-behavioral conclusions. This authored work will serve as the market’s most comprehensive reference on the neurobiology of social behavior. The volume will offer an introduction to neural systems and genetics/epigenetics, followed by detailed study of a wide range of behaviors - aggression, sex and sexual differentiation, mating, parenting, social attachments, monogamy, empathy, cooperation, and altruism. Research findings on the neural basis of social behavior will be integrated across different levels of analysis, from molecular neurobiology to neural systems/behavioral neuroscience to fMRI imaging data on human social behavior. Chapters will cover research on both normal and abnormal behaviors, as well as developmental aspects. 
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CMOs Of The Future Will Practice Decision Science

CMOs Of The Future Will Practice Decision Science | Bounded Rationality and Beyond | Scoop.it

In the past few months, Predictive Marketing has become more mainstream. CMOs and senior marketers are becoming scientific and more focused on understanding which potential customers are most likely to become new opportunities, but more importantly which potential customers are actually good andqualified potential customers. Marketing has historically been a numbers game coupled with relatively unmeasurable creative — marketers measure success by how many somewhat qualified leads they acquire. This numbers game has resulted in a constant debate between senior marketers and senior sales executives over the definition of an MQL, SQL, or SAL. Most marketing and sales leaders would agree that this ongoing struggle is unhealthy — more time is spent placing blame than working together to identify the best customers for thebusiness as a whole.

With an astronomical increase in available data about customers through various primary sources like LinkedIn LNKD -0.55%, Yelp YELP +1.72%, Government portals, and the broader web, marketing organizations now have a new problem: which data about prospects is relevant? Which data actually matters for marketers to identify more and better prospects? Answering these questions across billions of new data points is difficult and requires extensive data science experience. Should marketers spend time building out data science organizations and buying disparate tools to mine and understand these new data points? No.

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What’s driving consumers’ car-buying behaviors?

What’s driving consumers’ car-buying behaviors? | Bounded Rationality and Beyond | Scoop.it

U.S. automotive sales are about 1 million units below where they should be given the long-term historical patterns in the industry.

That’s according to a range of analysts who spoke at the Center for Automotive Research’s Management Briefing Seminars held earlier this month in Traverse City.

Most analysts at the CAR conference expect U.S. light vehicle sales to reach about 16.2 million units this year, up from a recent low of 10.4 million in 2009. But if historical patterns had held up in the recovery, experts said they would have expected to see sales of around 17.4 million vehicles in 2014. That deviation from historical patterns has many in the industry questioning what’s changed.

The answer is part behavioral, part economic and part a reflection of the industry making better products. But economics trumps most other factors for people considering big-ticket purchases, analysts said.

“Consumers are cautiously optimistic,” said Emily Kolinski Morris, senior economist at Ford Motor Co. and one of the speakers at the CAR event. “They see the positive trends that are going on in the economy right now overall, but they are also observing that it is not flowing through to their real incomes to the extent they would like to see. So that’s a little bit of a red flag for consumers.”

While economists acknowledge that the economy of the last few years has been anything but normal, they pointed to a range of factors that have played a role in consumers’ vehicle-buying behavior. Moreover, it’s been the result of cross-generational shifts — not just related to the millennials, the industry’s favorite scapegoat, according to experts.

#neuroeeconomy

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Researchers discover sense of 'cuteness' is innate -- here's what it looks like

Researchers discover sense of 'cuteness' is innate -- here's what it looks like | Bounded Rationality and Beyond | Scoop.it

The New York Times once called cat pictures an “essential building block of the Internet”– and now we know why. Humans are hard-wired to identify cuteness. A new study finds that infants will gaze longer at pictures of cats, babies, and dogs that were manipulated to have a “large head and a round face, a high and protruding forehead, large eyes, and a small nose and mouth.”

Interest was quantified with eye-tracking technology that could measure how long infants looked at a particular image. The picture above shows the subtle differences in eyes, forehead, and mouth that can make something worthy of rapt attention or casual dismissal.

 
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Political Dogma is Holding Back Reform in Economics (Part 1)

Political Dogma is Holding Back Reform in Economics (Part 1) | Bounded Rationality and Beyond | Scoop.it
Do you know what we need before we can have a sound monetary system, a reformed economic curricula, and wealth redistribution instruments?
We need critically sound economic discourse.

How can we transform economics and move it away from its current state of unproductive dogmatic thinking?

One key way would be in reforming the way economics is taught to students around the world.

In a recent post I argued that in the discipline of economics rational debates of ideas have been replaced by dogma, to the detriment of society. A dogma is a set of principles that are laid down by an overarching authority and are seen as incontrovertibly true. That is what economics has become.

Today, economics is taught as a set of assumptions that are considered unquestionably infallible, static, and true. Even after the 2008 financial crisis demonstrated how badly economics could miss obvious oncoming troubles, the field remains mired in the certitude of its own thought processes. The economics curriculum is supposed to create critical thinkers who want to help improve society. Instead it is producing lazy thinkers who believe in a market-based reality that exists only in their minds and their textbooks.

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CFA Institute Magazine: Guarding Portfolios against Bubble Risk

CFA Institute Magazine: Guarding Portfolios against Bubble Risk | Bounded Rationality and Beyond | Scoop.it

Why have financial bubbles happened more frequently in the past three decades? With economists and policymakers unable to find satisfactory answers, investors must find ways of guarding portfolios against bubble risk, as investment strategist Nicholas Sargen explains in the latest issue of CFA Institute Magazine. 

More highlights from the July/August issue include:

The link between equity market reforms and economic growth in Asia.

Using biomimicry to improve investment decision making.

How controversy over high-frequency trading highlights the tension between innovation and regulation.

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Jocelyn Stoller's curator insight, August 15, 11:13 AM

Why have financial bubbles happened more frequently in the past three decades?


Thoughtless deregulation, undermining of governmental oversight, overturning of proven safeguards and firewalls, ignoring lessons of the past, disinformation disseminated from Think Tanks promoting market fundamentalism—and the unfettered and delusional arrogance of greedy speculators and the malfeasance of numerous corporate executives (most of whom have faced no form of accountability.)