Bounded Rationali...
Follow
Find
30.3K views | +21 today
 
Rescooped by Alessandro Cerboni from Black swans, risks and crisis
onto Bounded Rationality and Beyond
Scoop.it!

What You Don't Know Can Kill You | Memory, Emotions, & Decisions

What You Don't Know Can Kill You | Memory, Emotions, & Decisions | Bounded Rationality and Beyond | Scoop.it
Humans have a perplexing tendency to fear rare threats such as shark attacks while blithely ignoring far greater risks like unsafe sex and an unhealthy diet. Those illusions are not just silly—they make the world a more dangerous place. .

Via Philippe Vallat
more...
No comment yet.

From around the web

Bounded Rationality and Beyond
News on the effects of bounded rationality in economics and business, relationships and politics
Your new post is loading...
Your new post is loading...
Scooped by Alessandro Cerboni
Scoop.it!

Why is Behavioral Economics so Revolutionary?

Why is Behavioral Economics so Revolutionary? | Bounded Rationality and Beyond | Scoop.it

Imagine that a patient suffering from unusually profound amnesia has two toasters in his kitchen. The toaster on the right functions normally. The toaster on the left delivers an electric shock when the toast is removed. The patient’s gasp and quick retraction of his hand indicate that the shock is painful. Because the patient does not remember the experience, however, he does not anticipate the shock the next morning, and is consequently indifferent between the toasters. Although the decision utility he obtains is the same for both toasters, otherwise he wouldn’t be indifferent between them; the experienced utilities are quite different for each of the toasters; something he only realizes when he uses one of them.

Systematic discrepancies between decision utility and experienced utility, as research in the field of behavioral decision theory has been shown, are not restricted to pathological cases. They can also be observed in decision makers whose cognitive functions are normal. These observations question on the idea that observed choices provide a direct measure of utility, and is revolutionizing the way we look at society and policy.

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Religion, Redistribution and Political Participation

Abstract: Since Marx and Weber, social scientists have attempted to understand the impact or lack thereof of religion on two core domains of political life: whether religion influences attitudes about wealth accumulation, inequality and redistribution; and whether religion dampens or inspires political participation. However, the effect of religious ideas on these domains is difficult to identify, at the very least because citizens often select into religious associations whose messages they find appealing. We shed light on this issue through an experiment in Nairobi, Kenya. Focusing on the effects of two important contemporary Christian messages, we find evidence that exposure to religious messages can reduce egalitarianism in complex distribution decisions, compared to exposure to secular messages. We also find that exposure to self-affirmation messages—both religious and secular—can be politically empowering and motivate activism. We discuss implications of these findings for political mobilization and policy preferences in Sub-Saharan Africa, as well as for the study of religion and politics more generally.

 
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Autopoiesis with or without cognition: defining life at its edge

This paper examines two questions related to autopoiesis as a theory for minimal life: (i) the relation between autopoiesis and cognition; and (ii) the question as to whether autopoiesis is the necessary and sufficient condition for life. First, we consider the concept of cognition in the spirit of Maturana and Varela: in contradistinction to the epresentationalistic point of view, cognition is construed as interaction between and mutual definition of a living unit and its environment. The most direct form of cognition for a cell is thus metabolism itself, which necessarily implies exchange with the environment and therefore a simultaneous coming to being for the organism and for the environment. A second level of cognition is recognized in the adaptation of the living unit to new foreign molecules, by way of a change in its metabolic pattern. We draw here an analogy with the ideas developed by Piaget, who recognizes in cognition the two distinct steps of assimilation and accommodation. While  assimilation is the equivalent of uptake and exchange of usual metabolites, accommodation  corresponds to biological adaptation, which in turn is the basis for evolution. By comparing a micro-organism with a vesicle that uptakes a precursor for its own self-reproduction, we arrive at the conclusion that (a) the very lowest level of cognition is the condition for life, and (b) the lowest level of cognition does not reduce to the lowest level of autopoiesis. As a consequence, autopoiesis alone is only a necessary, but not sufficient, condition for life. The broader consequences of this analysis of cognition for minimal living systems are considered

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Neurofenomenologia: una scienza che trae vantaggio dal proprio punto cieco

La neurofenomenologia • l'ultimo grande progetto al contempo scientifico, filosofico ed esistenziale al quale Francisco Varela ha lavorato. Ma, prima di parlarne, vorrei evocare brevemente quella che credo sia la fonte vissuta e unica della sua opera, ed in particolar modo della neurofenomenologia. Questa fonte, cos“ come l'ho percepita, •una volontà molto forte, quasi tirannica, di tenere insieme l'integralità dei fili del tessuto umano, a partire dall'indagine scientifica spinta ad un optimum di rigore fino alla condotta etica costretta ad incarnarsi, passando per questa tacita condizione di possibilità del resto: l'apertura a ci˜ che accade.

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Mind, Society and Behaviour - RSA

Mind, Society and Behaviour - RSA | Bounded Rationality and Beyond | Scoop.it

Development economics and policy are due for a redesign. A more realistic understanding of how human beings think and behave can make development policies more effective, and can help development professionals become more aware of their own biases.

A great deal of development policy aims to supply the resources and information people require in their voyage through life. While such an approach is often appropriate, it is also incomplete. People are not perfect calculators of costs and benefits. They rely on heuristics and mental shortcuts. They are influenced by social norms and culture. Poverty is not simply a state of material deprivation, but also a “tax” on cognitive resources that affects the quality of decision making. Fortunately, policies can often be made more effective by simple changes in design, framing and delivery. Recent research from psychology and sociology together with new experimental methods in economics shows how. The 2015 World Development Report interprets this research to formulate many simple lessons for policy making and implementation.

 

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

[1505.04722] On the tail risk of violent conflict and its underestimation

We examine all possible statistical pictures of violent conflicts over common era history with a focus on dealing with incompleteness and unreliability of data. We apply methods from extreme value theory on log-transformed data to remove compact support, then, owing to the boundedness of maximum casualties, retransform the data and derive expected means. We find the estimated mean likely to be at least three times larger than the sample mean, meaning severe underestimation of the severity of conflicts from naive observation. We check for robustness by sampling between high and low estimates and jackknifing the data. We study inter-arrival times between tail events and find (first-order) memorylessless of events. The statistical pictures obtained are at variance with the claims about "long peace".

 
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Research shows brain differences in children with dyslexia and dysgraphia

Research shows brain differences in children with dyslexia and dysgraphia | Bounded Rationality and Beyond | Scoop.it

University of Washington research shows that using a single category of learning disability to qualify students with written language challenges for special education services is not scientifically supported. Some students only have writing disabilities, but some have both reading and writing disabilities.

The study, published online in NeuroImage: Clinical, is among the first to identify structural white matter and functional gray matter differences in the brain between children with dyslexia and dysgraphia, and between those children and typical language learners.

 

The researchers say the findings underscore the need to provide instruction tailored to each of these specific learning disabilities, though that is currently not mandated under federal or state law.

 
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Collaboration is not "soft"

Collaboration is not "soft" | Bounded Rationality and Beyond | Scoop.it
I am occasionally left a little baffled by some of the stuff I read about digital social tools. In a lot of what I read and hear, there is no lack of intelligent analysis about social tools and their potential usefulness, however I do think that there is a huge dimension that is just absent.  That is the “social” bit.  I know, I know…. I only bring my understanding of what it means for human beings to be social from my own trajectory in life.  Sadly (or maybe not) in an increasingly technological world, that trajectory has not had a huge technological dimension to it.  I happily use digital social tools regularly and have learnt how they can assist me to connect and collaborate with others.  I also sometimes struggle with having to learn how to interface with the machine, often frustrated at why it doesn’t interface with me, but that’s another conversation.  When I ponder on the usefulness or otherwise of digital social tools, with relation to collaboration, my brain whirs and comes to the conclusion that it’s much less about the technical features or ubiquity or ease of use of digital social tools, and more about the users of the tools.
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Asymmetries in blue–yellow color perception and in the color of ‘the dress’: Current Biology

Asymmetries in blue–yellow color perception and in the color of ‘the dress’: Current Biology | Bounded Rationality and Beyond | Scoop.it
Summary

#BIAS The perception of color poses daunting challenges, because the light spectrum reaching the eye depends on both the reflectance of objects and the spectrum of the illuminating light source. Solving this problem requires sophisticated inferences about the properties of lighting and surfaces, and many striking examples of ‘color constancy’ illustrate how our vision compensates for variations in illumination to estimate the color of objects (for example [1–3] ). We discovered a novel property of color perception and constancy, involving how we experience shades of blue versus yellow. We found that surfaces are much more likely to be perceived as white or gray when their color is varied along bluish directions, compared with equivalent variations along yellowish (or reddish or greenish) directions. This selective bias may reflect a tendency to attribute bluish tints to the illuminant rather than the object, consistent with an inference that indirect lighting from the sky and in shadows tends to be bluish [4] . The blue–yellow asymmetry has striking effects on the appearance of images when their colors are reversed, turning white to yellow and silver to gold, and helps account for the variation among observers in the colors experienced in ‘the dress’ image that recently consumed the internet. Observers variously describe the dress as blue–black or white–gold, and this has been explained by whether the dress appears to be in direct lighting or shade (for example [5] ). We show that these individual differences and potential lighting interpretations also depend on the special ambiguity of blue, for simply reversing the image colors causes almost all observers to report the lighter stripes as yellowish.

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

It’s hard to make ‘good’ decisions

It’s hard to make ‘good’ decisions | Bounded Rationality and Beyond | Scoop.it
A small group of business leaders was part of Mint’s Breakfast With CEOs event on 16 April 2015 at ITC Maurya’s Dum Pukht restaurant in Delhi. They were in conversation with a person who is known as the father of behavioural economics—Richard Thaler. The Charles R. Walgreen Distinguished Service Professor of Behavioural Science and Economics at the University of Chicago Booth School of Business and co-author of global bestseller Nudge: Improving Decisions About Health, Wealth and Happinesshas challenged the status quo among Economics academics to prove that the world is not made of Econs, or perfectly rational people analyzing reams of information to perfectly maximize utility, but of Humans, or real people who take irrational decisions and are suscptible to biases. Thaler advocates using ‘nudges’ for good outcomes, or putting in place a choice architecture that induces people to take decisions that are ‘good’ for them. The discussion, moderated by R. Sukumar, editor, Mint, generated a lively conversation about the use of behavioural economics in solving problems in business and policy. 
more...
Miklos Szilagyi's curator insight, May 17, 4:50 AM

"...Economists not only assume that people are perfect, they also assume that organizations are perfect; that firms are maximizing profits. The reason why they assume that is because it is the easiest thing to do. All of you as CEOs know that if I just tell you to maximize profits, does it mean raise or lower the price? Should you advertise more or less? This math is complicated and what you see in every domain of life is that there are these rules of thumb and ways of doing things because we have always done them that way, whether or not they make any sense...."

Scooped by Alessandro Cerboni
Scoop.it!

The Great P/E Debate: Are Stocks Overvalued?

The Great P/E Debate: Are Stocks Overvalued? | Bounded Rationality and Beyond | Scoop.it

Janet Yellen made headlines last week with her comment that stock market valuations "generally are quite high." The market took note, driving down prices.

Is she right? Are stocks overvalued?

It certainly feels that way to most investors. Stocks are trading at all-time highs and are in the midst of a bull market that has seen the S&P 500 move up more than 200% since mid-2009 lows.

However, investing based upon feelings isn't usually a very good idea. That's why we rely so much on statistical models to help us be objective about where market valuations stand at any given point in time. Let's see what we can uncover.

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Bayesian Model Comparison Favors Quantum Over Standard Decision Theory Account of Dynamic Inconsistency

Many paradoxical findings in decision-making that have resisted explanations by standard decision theories have accumulated over the past 50 years. Recent advances based on quantum probability theory have successfully accounted for many of these puzzling findings. Critics, however, claim that quantum probability theory is less constrained than standard probability theory, and hence quantum models only fit better because they are more complex than standard decision models. In this article, for the first time, a Bayesian method was used to quantitatively compare the 2 types of decision models, which is a method that evaluates models with respect to accuracy, parsimony, and robustness. A large experiment was used to compare the best-known models of each type, matching in their numbers of parameters, but possibly differing in the complexity of their functional forms. Surprisingly, the Bayesian model comparison overwhelmingly favored the quantum model, indicating that its success is due to its robust ability to make accurate predictions rather than accidental fits afforded by increased complexity

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Optimal Census by Quorum Sensing

Optimal Census by Quorum Sensing | Bounded Rationality and Beyond | Scoop.it
Author Summary Bacteria regulate gene expression in response to changes in cell density in a process called quorum sensing. To synchronize their gene-expression programs, these bacteria need to glean as much information as possible about their cell density. Our study is the first to physically model the flow of information in a quorum-sensing microbial community, wherein the internal regulator of the individuals response tracks the external cell density via an endogenously generated shared signal. Combining information theory and Lagrangian formalism, we find that quorum-sensing systems can improve their information capabilities by tuning circuit feedbacks. Our analysis suggests that achieving information benefit via feedback requires dedicated systems to control gene expression noise, such as sRNA-based regulation.
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Matteo Motterlini - I segreti della neuroeconomia - YouTube

I segreti della neuroeconomia: conoscere il cervello può aiutarci a uscire dalla crisi economica?. Festa di Scienza e Filosofia, terza edizione. Foligno, Pal...
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

The Neuroscience Of Why Organizational Change Fails

The Neuroscience Of Why Organizational Change Fails | Bounded Rationality and Beyond | Scoop.it
Did you know that 75% of organizational change initiatives fail? Our brains are hard-wired to resist change. Learn how you to help employees overcome this.  

Neuroscience is one of my favorite topics, and recently it’s one of the things I spend most of my free time learning about.

More and more, leaders will need to understand the neuroscience and psychology of motivation if they want to have high performing teams. Employee engagement, while mostly common sense, is something that employers still seem to get wrong.

The reason for why they get it wrong is because of how delicate humans are. Everyone is different, and there is no standard way of dealing with everyone. Some people are introverts, some are extroverts, some are ambiverts. There are people that work best in the morning, some work best at night, some like to work from home, some can’t work from home.

These are all small examples of why we need to understand human behavior as much as possible if we want to be great leaders. 

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Ritual performance and religion in early Neolithic societies, in Defining the Sacred: Approaches to the Archaeology of Religion in the Near East, ed. Nicola Laneri (2015)

South-west Asia in the last 10 millennia of the Palaeolithic (known regionally as the Epi-palaeolithic) and the early (aceramic) Neolithic saw the emergence of a completely new kind of human social organisation in the form of large, permanently
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Improvvisare. Nell'arte contemporanea, nella scienza e nella vita quotidiana

L'improvvisazione è l'arte più scientifica che esista. Perchè in verità l'improvvisazione è soltanto metà della storia: l'altra metà è che bisogna avere la macchina dentro. Devi acquisire moduli infiniti di svolgimento, devi impararli,come un suonatore di jazz che sa di dover rientrare alla sedicesima battuta, e ne ha sedici a disposizione per fare le varianti. Tutte le consonanti del canto lui le ha dentro, e va insieme al battere e al levare. E naturalmente si lega ai ritmi, ai tempi, al contrappunto. La matematica del contrappunto è la stessa nella commedia, nel monologo, nella musica

1.
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Nick Naumof: The (only) Question that Could Have Accurately Predicted the Winner in Recent Elections in Romania

Nick Naumof: The (only) Question that Could Have Accurately Predicted the Winner in Recent Elections in Romania | Bounded Rationality and Beyond | Scoop.it
I guess (some of) you know that, last Sunday, Romanians elected a new president. This is not news. The news is that the under-dog challenger won against all odds and predictions. All pre-election polls predicted that the favourite – the incumbent Prime Minister – will win and at a comfortable difference. But, things didn’t happen as expected. The opposition’s candidate won at a very comfortable difference – 54.5% to 45.5% (roughly 9% of expressed votes) which in absolute numbers represents more than 1.100.000 votes. Now, that the results are known, there are a lot of people explaining how it happened. Yeah… Hindsight Bias! There is, however, a question – methodology – that could have predicted the winner with accuracy.
more...
No comment yet.
Rescooped by Alessandro Cerboni from Social Foraging
Scoop.it!

Evolutionary Dynamics for Persistent Cooperation in Structured Populations

The emergence and maintenance of cooperative behavior is a fascinating topic in evolutionary biology and social science. The public goods game (PGG) is a paradigm for exploring cooperative behavior. In PGG, the total resulting payoff is divided equally among all participants. This feature still leads to the dominance of defection without substantially magnifying the public good by a multiplying factor. Much effort has been made to explain the evolution of cooperative strategies, including a recent model in which only a portion of the total benefit is shared by all the players through introducing a new strategy named persistent cooperation. A persistent cooperator is a contributor who is willing to pay a second cost to retrieve the remaining portion of the payoff contributed by themselves. In a previous study, this model was analyzed in the framework of well-mixed populations. This paper focuses on discussing the persistent cooperation in lattice-structured populations. The evolutionary dynamics of the structured populations consisting of three types of competing players (pure cooperators, defectors and persistent cooperators) are revealed by theoretical analysis and numerical simulations. In particular, the approximate expressions of fixation probabilities for strategies are derived on one-dimensional lattices. The phase diagrams of stationary states, the evolution of frequencies and spatial patterns for strategies are illustrated on both one-dimensional and square lattices by simulations. Our results are consistent with the general observation that, at least in most situations, a structured population facilitates the evolution of cooperation. Specifically, here we find that the existence of persistent cooperators greatly suppresses the spreading of defectors under more relaxed conditions in structured populations compared to that obtained in well-mixed population.

Via Ashish Umre
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

10 Cognitive Biases That Can Lead to Bad Decisions

10 Cognitive Biases That Can Lead to Bad Decisions | Bounded Rationality and Beyond | Scoop.it

Because CFOs are not actually superhuman, but just people like everyone else, they too are subject to a 
lengthy list of cognitive biases that influence our decisions and actions. In the corporate finance context, these biases, if unchecked, can have devastating consequences for company performance. Finance executives steered by unbridled cognitive biases are less likely to meet their financial commitments, saysThomas Conine, a finance professor at Fairfield University and president of TRI Corp., which helps large companies execute financial-education and leadership-development programs

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

The general equilibrium theory as economic metatheory

The general equilibrium theory as economic metatheory | Bounded Rationality and Beyond | Scoop.it
http://www.rep.org.br/PDF/139-6.PDF
Many economists show certain nonconformity relative to the excessive mathematical 
formalization of economics. This stems from dissatisfaction with the old debate 
about the lack of correspondence between mainstream theoretical models and 
reality. Although we do not propose to settle this debate here, this article seeks to 
associate the mismatch of mathematized models with the reality of the adoption of 
the hypothetical-deductive method as reproduced by general equilibrium. We begin 
by defining the main benefits of the mathematization of economics. Secondly, we address 
traditional criticism leveled against it. We then focus on more recent criticism 
from Gillies (2005) and Bresser-Pereira (2008). Finally, we attempt to associate the 
reproduction of the hypothetical-deductive method with a metatheoretical process 
triggered by Debreu’s general equilibrium theory. In this respect, we appropriate the 
ideas of Weintraub (2002), Punzo (1991), and mainly Woo (1986) to support our 
hypothesis.
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

The many colours of ‘the dress’: Current Biology

The many colours of ‘the dress’: Current Biology | Bounded Rationality and Beyond | Scoop.it
Summary

There has been an intense discussion among the public about the colour of a dress, shown in a picture posted originally on Tumblr (http://swiked.tumblr.com/post/112073818575/guys-please-help-me-is-this-dress-white-and; accessed on 10:56 am GMT on Tue 24 Mar 2015). Some people argue that they see a white dress with golden lace, while others describe the dress as blue with black lace. Here we show that the question “what colour is the dress?” has more than two answers. In fact, there is a continuum of colour percepts across different observers. We measured colour matches on a calibrated screen for two groups of observers who had reported different percepts of the dress. Surprisingly, differences between the two groups arose mainly from differences in lightness, rather than chromaticity of the colours they adjusted to match the dress. We speculate that the ambiguity arises in the case of this particular image because the distribution of colours within the dress closely matches the distribution of natural daylights. This makes it more difficult to disambiguate illumination changes from those in reflectance.

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

What really drives Economic Growth?

Which is more effective "Austerity" or "Quantitative Easing"?

In nature after an evolutionary collapse, mother-nature will begin to rebuild, and in a normal business cycle so too would an economy.  However in a boom and bust cycle things are not quite so easy!

Disposable Income

The starting point for all of economics is excess.  In a time before money, being able to produce more than one’s own immediate needs lead to the emergence of barter.  But with the introduction of money – which acts both, as a means of exchange, and a store of wealth – “excess productivity and production” could lead to the accumulation of “disposable income”; and it is this disposable income that drives all economies in 2 separate ways

Consumption: disposable income drives trade, and thus economic activity.Investment: disposable income drives innovation, and thus economic complexity.
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Can quantum probability provide a new direction for cognitive modeling?

Abstract: Classical (Bayesian) probability (CP) theory has led to an influential research tradition for modeling cognitive processes. Cognitive scientists have been trained to work with CP principles for so long that it is hard even to imagine alternative ways to formalize probabilities. However, in physics, quantum probability (QP) theory has been the dominant probabilistic approach for nearly 100 years. Could QP theory provide us with any advantages in cognitive modeling as well? Note first that both CP and QP theory share the fundamental assumption that it is possible to model cognition on the basis of formal, probabilistic principles. But why consider a QP approach? The answers are that (1) there are many well-established empirical findings (e.g., from the influential Tversky, Kahneman research tradition) that are hard to reconcile with CP principles; and (2) these same findings have natural and straightforward explanations with quantum principles. In QP theory, probabilistic assessment is often strongly context- and orderdependent, individual states can be superposition states (that are impossible to associate with specific values), and composite systems can be entangled (they cannot be decomposed into their subsystems). All these characteristics appear perplexing from a classical perspective. However, our thesis is that they provide a more accurate and powerful account of certain cognitive processes. We first introduce QP theory and illustrate its application with psychological examples. We then review empirical findings that motivate the use of quantum theory in cognitive theory, but also discuss ways in which QP and CP theories converge. Finally, we consider the implications of a QP theory approach to cognition for human rationality.

more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Intuitive Intelligence - the untapped human capacity

Intuitive Intelligence - the untapped human capacity | Bounded Rationality and Beyond | Scoop.it

Human beings have capabilities beyond thinking and doing. We have the capacity of intuitive intelligence. We have all had experiences where we "sensed" something was going to happen. Well, there is science that validates this is a real capability. Even though the military and other specialized organizations have been using techniques to increase this capacity for decades, it hasn't made it mainstream, yet.

The Human Sustainability Institute synthesizes human capability and capacity building into our consulting and coaching work. Even though the traditional organization development field remains stigmatized in environmental influences to catalyze change. As pioneers, we have taken the best in class techniques for personal mastery from multiple fields and offer them as tools for leaders and organizations to cultivate their most precious resource, the HUMAN resource.

 
more...
No comment yet.