Bounded Rationali...
Follow
Find
26.2K views | +0 today
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!

La stupidità scientifica: il concetto di produzione interna di entropia. | complexsystems.it

La stupidità scientifica: il concetto di produzione interna di entropia. | complexsystems.it | Bounded Rationality and Beyond | Scoop.it

Molti pensatori, del calibro di Cartesio, Pascal, Einstein, Hubbard, Huxley, Pontiggia, Wilde, per citarne solo alcuni, confermano quanto è scritto nell’ Ecclesiaste: “infinito è il numero degli stolti”,Ovviamente, tale giudizio non implica l’esistenza di una condizione patologica, ma la semplice constatazione di una variabilità estrema della funzione intellettiva nella specie umana di carattere strutturale. Già sul piano evolutivo è logico ritenere che ciò non sia un fatto marginale e casuale, ma che tale condizione abbia avuto un suo importante ruolo nel determinare il successo evolutivo della nostra specie. La fisica dei sistemi complessi permette però di approfondire tale argomentazione.

Essa mostra, innanzi tutto, come questa condizione sia quella che caratterizza la nozione stessa di sistema, che può essere definito come una struttura stratificata di vincoli che creano dei campi di forza interni le cui leggi differiscono da quelle dei campi di forza esterni. Non può esistere un sistema in condizione di omogeneità della struttura delle forze interne; ciò può apparire oggi una cosa banale, ovvia, eppure si può dire che il premio Nobel a Prigogine sia dovuto all’aver mostrato che l’organizzazione richiede una condizione di disequilibrio (principio di organizzazione di Prigogine). La direzione del disequilibrio ne esprime la semantica e la funzionalità, la sua ragion d’essere.

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

Video: How to understand the economy from the ground up | Santa Fe Institute

Video: How to understand the economy from the ground up | Santa Fe Institute | Bounded Rationality and Beyond | Scoop.it

SFI External Professor Doyne Farmer describes how he and his SFI collaborators are building a high fidelity model of the financial crisis and housing market collapse, including the behaviors of individual banks, investors, and individuals playing roles in the economy

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

Deric Bownds' MindBlog: The MindBlog queue: moral responsibility; evolution of music; booze and hypnosis

Deric Bownds' MindBlog: The MindBlog queue: moral responsibility; evolution of music; booze and hypnosis | Bounded Rationality and Beyond | Scoop.it

During this period of relative inactivity for MindBlog, while I am pursuing other projects, I still accumulate references to work that looks interesting. Rather than letting them disappear into the list of potential posts that has accumulated by now to 50 pages of links, I’m going to post some of the links, with minimal descriptions, to make it possible for readers who find a favorite topic to click their way to the source.

more...
No comment yet.
Rescooped by Alessandro Cerboni from Global Brain
Scoop.it!

Self-organizing Intelligence | DDRRNT

Self-organizing Intelligence | DDRRNT | Bounded Rationality and Beyond | Scoop.it
... different outcomes. That is why such a process of group discussion and emergent interaction patterns needs to be understood with the conceptual tools of complexity science.” Francis Heylighen (Vrije Universiteit Brussel) ...

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

Watch "The Psyco-Economy of Charlie Brown: Matteo Motterlini at TEDxLakeComo" Video at TEDxTalks

Philosopher and neuroeconomist . He studied philosophy, economics and cognitive sciences in Milan, the London School of Economics and Carnegie Mellon University. He teaches a combination of these at San Raffaele.
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Be Grateful for Your Senses

Be Grateful for Your Senses | Bounded Rationality and Beyond | Scoop.it
The most precious gifts in our lives, and consequently the things we happen to take for granted the most, are our senses: our vision, hearing, touch, taste, and smell - the building blocks of how we perceive and understand our world.

Imagine if you had just one sense to perceive the world

Choose one sense. Now imagine how your life would be different if you only had that one sense to perceive everything in the world and nothing else:

How would your perception of the world be different?

How would you need to think and act differently to adapt to your surroundings?

What kind of things would you no longer be able to experience?

What would it be like if your one sense became super heightened?

Take a moment to imagine what it would be like with just one of your senses. Ask yourself these questions and ponder them.

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

Applying Behavioral Economics to the Developing World

Applying Behavioral Economics to the Developing World | Bounded Rationality and Beyond | Scoop.it
Speaking from an engineering and (hopefully) entrepreneurial perspective, one of the reasons why work in the developing world is fascinating is the challenge it poses.
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Forecasting from ignorance: The use and usefulness of recognition in lay predictions of sports events

Forecasting from ignorance: The use and usefulness of recognition in lay predictions of sports events | Bounded Rationality and Beyond | Scoop.it

Thorsten Pachur, ,Guido Biele

Max Planck Institute for Human Development, Center for Adaptive Behavior and Cognition,  Berlin, Germany

 

Whereas previous studies on how people make forecasts of sports events focused primarily on experts, we examined how laypeople do this task. In particular, we (a) tested the recognition heuristic [Goldstein, D. G., & Gigerenzer, G. (2002). Models of ecological rationality: the recognition heuristic. Psychological Review, 109, 75–90], which requires partial ignorance, against four alternative mechanisms in describing laypeople’s forecasts for the European Soccer Championships 2004; (b) evaluated how well recognition predicted the outcomes of the matches compared to direct indicators of team strength (e.g., past performance, rankings); and (c) studied the less-is-more effect—the phenomenon that knowing less leads to more correct forecasts than knowing more—which can occur when the recognition heuristic is used. Two groups of participants (laypeople, experts) made forecasts for the first-round matches of the tournament. Of the five candidate mechanisms, the recognition heuristic predicted laypeople’s forecasts best: when applicable, it accounted for 90% of the forecasts. The recognition heuristic correctly predicted the actual winner of the matches substantially better than chance but did not achieve the accuracy of direct indicators of team strength. The experts made more correct forecasts than the laypeople. Moreover, we found no benefit of ignorance among the group of laypeople, although the conditions for a less-is-more effect specified by Goldstein and Gigerenzer were fulfilled.

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

Risk, Entitlements and Fairness Bias: Explaining Preferences for Redistribution in Multi-person Setting

Mitesh Kataria ) and Natalia Montinari - 2012

Researchers frequently studied the casual relationships of other-regarding preferences by applying experimental methods in bilateral settings (e.g., dictator game and ultimatum game). We use a framed experiment on taxes to study preferences for redistribution in a multi-person setting. We find presence of heterogeneous preferences with a substantial share of tax rate choices in line with both payoff maximization and other-regarding preferences. Notably, our data is not consistent with inequality aversion but points to other forms of other-regarding preferences, as fairness and altruism. By manipulating how subjects are assigned to a given level of pre-tax income, we vary the individual entitlements. We find a difference in the willingness to redistribute income when comparing the treatment where pre-tax income is assigned by relative performance in a production task (a general knowledge quiz) to the treatment where pre-tax income is assigned by luck. We do not find any significant difference in comparison to the intermediate treatment where pre-tax income is assigned by a combination of luck and performance. The perception of a "fair" tax is different depending on whether subjects' pre-tax income is below or above average, which is in line with a fairness bias. Finally, subjects not knowing whether their pre-tax income is below or above the average when choosing the tax rate behave as if they were more other-regarding.

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

The Politics of Happiness: Subjective vs. Economic Measures As Measures of Social Well-Being

The Politics of Happiness: Subjective vs. Economic Measures As Measures of Social Well-Being | Bounded Rationality and Beyond | Scoop.it
Subjective measures of well-being - based on questions like "Taking things all together, how would you say things are these days: would you say you're very happy, pretty happy, or not too happy these days?
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Interfacing the Brain Directly with Musical Systems: On Developing Systems for Making Music with Brain Signals

Interfacing the Brain Directly with Musical Systems: On Developing Systems for Making Music with Brain Signals | Bounded Rationality and Beyond | Scoop.it

The authors discuss their work on developing technology to interface the brain directly with music systems, a field of research generally known as Brain-Computer Interfacing (BCI). The paper gives a brief background of BCI in general and surveys various attempts at musical BCI, or Brain-Computer Music Interface (BCMI) — systems designed to make music from brain signals, or brainwaves. The authors present a technical introduction to the electroencephalogram (EEG), which measures brainwaves detected by electrodes placed directly on the scalp. They introduce approaches to the design of BCI and BCMI systems and present two case study systems of their own design: the BCMI-Piano and the Inter-Harmonium.

Eduardo Reck MirandaComposer, Researcher, Teacher

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

Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough

Joaquín Gómez-Miñambres, Brice Corgnet and Roberto Hernán-Gonzalez, 2012

The aim of this paper is to test the effectiveness of wage-irrelevant goal setting policies in a laboratory environment. In our design, managers can assign a goal to their workers by setting a certain level of performance on the work task. To establish our theoretical conjectures we develop a model where assigned goals act as reference points to workers’ intrinsic motivation, creating a sense of gain when attained and a sense of loss when not attained. Consistent with our theoretical framework, we find evidence that managers set goals that are challenging but attainable for an average-ability worker. Workers respond to these goals by increasing effort, performance and by decreasing on-the-job leisure activities with respect to the no-goal setting baseline. We study the interaction between goal setting and monetary rewards by considering different values for the monetary incentives involved in completing the task. Interestingly, we find that goal setting is especially effective when monetary incentives are strong. These results suggest that goal setting may foster workers’ intrinsic motivation and increase their level of performance beyond what is achieved using solely monetary incentives.

 

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

Cognitive Resource Depletion, Choice Consistency, and Risk Preferences

Marco Castillo, David L. Dickinson and Ragan Petrie - 2012

Abstract: We investigate the consistency and stability of individual risk preferences by slightly manipulating the cognitive resources of subjects through sleepiness. Participants are recruited and randomly assigned to an experiment session at a preferred time of day relative to their diurnal preference (circadian matched) or at a non-preferred time of day (circadian mismatched). For the decision task, subjects and are asked to choose how much to allocate between two state-dependent assets (using the Choi et al., 2007, design). We have two main findings. First, the consistency of behavior for circadian matched and mismatched subjects is statistically the same. This is true whether it is (nonparametrically) defined as consistency with GARP, payoff dominance, expected utility, disappointment aversion or cumulative prospect theory. Second, while our cognitive resource manipulation yields no difference in consistency of behavior, it results in an increased tendency to take risk. Our experiment confirms theoretical predictions that preferences are consistent yet state-dependent.

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

Controvento - L'incertezza non è per caso (e neppure il dialogo)

Controvento - L'incertezza non è per caso (e neppure il dialogo) | Bounded Rationality and Beyond | Scoop.it
MM: Però c'è del metodo nella nostra follia: la nostra irrazionalità può essere investigata e catturata in maniera empirica, "scientifica"; e pertanto compresa – sfiorando il paradosso - in modo "razionale".
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Neuroscience and Moral Responsibility

Neuroscience and Moral Responsibility | Bounded Rationality and Beyond | Scoop.it
A look at whether anomalies in the brain can let us off the hook for certain behavior. 

Often we think not. For example, research now suggests that the brain’s frontal lobes, which are crucial for self-control, are not yet mature in adolescents. This finding has helped shape attitudes about whether young people are fully responsible for their actions. In 2005, when the Supreme Court ruled that the death penalty for juveniles was unconstitutional, its decision explicitly took into consideration that “parts of the brain involved in behavior control continue to mature through late adolescence.”

Similar reasoning is often applied to behavior arising from chemical imbalances in the brain. It is possible, when the facts emerge, that the case of James E. Holmes, the suspect in the Colorado shootings, will spark debate about neurotransmitters and culpability.

Whatever the merit of such cases, it’s worth stressing an important point: as a general matter, it is always true that our brains “made us do it.” Each of our behaviors is always associated with a brain state. If we view every new scientific finding about brain involvement in human behavior as a sign that the behavior was not under the individual’s control, the very notion of responsibility will be threatened. So it is imperative that we think clearly about when brain science frees someone from blame — and when it doesn’t.

Unfortunately, our research shows that clear thinking on this issue doesn’t come naturally to people. Several years ago, with the psychologist Edward B. Royzman, we published a study in the journal Ethics & Behavior that demonstrated the power of neuroscientific explanations to free people from blame.

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

Intra- and interbrain synchronization and network properties when playing guitar in duets | Frontiers in Human Neuroscience

Intra- and interbrain synchronization and network properties when playing guitar in duets | Frontiers in Human Neuroscience | Bounded Rationality and Beyond | Scoop.it

To further test and explore the hypothesis that synchronous oscillatory brain activity supports interpersonally coordinated behavior during dyadic music performance, we simultaneously recorded the electroencephalogram (EEG) from the brains of each of 12 guitar duets repeatedly playing a modified Rondo in two voices by C.G. Scheidler. Indicators of phase locking and of within-brain and between-brain phase coherence were obtained from complex time-frequency signals based on the Gabor transform. Analyses were restricted to the delta (1–4 Hz) and theta (4–8 Hz) frequency bands. We found that phase locking as well as within-brain and between-brain phase-coherence connection strengths were enhanced at frontal and central electrodes during periods that put particularly high demands on musical coordination. Phase locking was modulated in relation to the experimentally assigned musical roles of leader and follower, corroborating the functional significance of synchronous oscillations in dyadic music performance. Graph theory analyses revealed within-brain and hyperbrain networks with small-worldness properties that were enhanced during musical coordination periods, and community structures encompassing electrodes from both brains (hyperbrain modules). We conclude that brain mechanisms indexed by phase locking, phase coherence, and structural properties of within-brain and hyperbrain networks support interpersonal action coordination (IAC).

more...
No comment yet.
Rescooped by Alessandro Cerboni from Global Brain
Scoop.it!

Man, Beast and Zombie - the human mind & conductive education ...

Man, Beast and Zombie - the human mind & conductive education ... | Bounded Rationality and Beyond | Scoop.it
In discussing cognitive science and philosophy of mind, Malik concludes that each human being possesses "an extended mind"; a brain becomes a human mind only by its immersion in social relationships together with "other ...

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

Counseling By Math: Why Your Relationship Is A Sine Wave

Counseling By Math: Why Your Relationship Is A Sine Wave | Bounded Rationality and Beyond | Scoop.it
Marriage counseling is so 20th century. The 21st century may belong to relationship neuroinformaticians because they can create a mathematical model for efficient communication in your love life. The dynamics of love can look like a...
more...
No comment yet.
Scooped by Alessandro Cerboni
Scoop.it!

Behavioral Economics: Past, Present, Future

Colin F. Camerer -

Behavioral economics increases the explanatory power of economics by providing it with more realistic psychological foundations. This book consists of representative recent articles in

behavioral economics. This chapter is intended to provide an introduction to the approach and methods of behavioral economics, and to some of its major findings, applications, and promising new directions. It also seeks to fill some unavoidable gaps in the chapters’ coverage of topics.

 

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

Forecasting Economic and Financial Variables with Global VARs

M. Hashem Pesaran- Til Schuermann - L. Vanessa Smith

This paper considers the problem of forecasting real and financial macroeconomic variables across a large number of countries in the global economy. To this end a global vector autoregressive (GVAR) model previously estimated over the 1979Q1-2003Q4 period by Dees, de Mauro, Pesaran, and Smith (2007), is used to generate out-of-sample one quarter and four quarters ahead forecasts of real output, inflation, real equity prices, exchange rates and interest rates over the period 2004Q1-2005Q4. Forecasts are obtained for 134 variables from 26 regions made up of 33 countries covering about 90% of world output. The forecasts are compared to typical benchmarks: univariate autoregressive and random walk models. Building on the forecast combination literature, the effects of model and estimation uncertainty on forecast outcomes are examined by pooling forecasts obtained from different GVAR models estimated over alternative sample periods. Given the size of the modeling problem, and the heterogeneity of economies considered — industrialised, emerging, and less developed countries — as well as the very real likelihood of possibly multiple structural breaks, averaging forecasts across both models and windows makes a significant difference. Indeed the double-averaged GVAR forecasts performed better than the benchmark competitors, especially for output, inflation and real equity prices.

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

A Beginner's Guide to Irrational Behavior Dan Ariely

A Beginner's Guide to Irrational Behavior Dan Ariely | Bounded Rationality and Beyond | Scoop.it
We are a social entrepreneurship company that partners with the top universities in the world to offer courses online for anyone to take, for free.

In this course we will learn about some of the many ways in which people behave in less than rational ways, and how we might overcome these problems.

Behavioral economics and the closely related field of behavioral finance couple scientific research on the psychology of decision making with economic theory to better understand what motivates investors, employees, and consumers. This course will be based heavily on my own research. We will examine topics such as how emotion rather than cognition determines economic decisions, “irrational” patterns of thinking about money and investments, how expectations shape perceptions, economic and psychological analyses of dishonesty by presumably honest people, and how social and financial incentives combine to motivate labor by everyday workers and CEOs alike. This highly interdisciplinary course will be relevant to students with interests in General Management, Behavioral Finance, Entrepreneurship, Social Entrepreneurship, and Marketing.

This class has two main goals:To introduce you to the range of cases where people (consumers, investors, managers, and significant others) make decisions that are inconsistent with standard economic theory and the assumptions of rational decision making. This is the lens of behavioral economics.To help you think creatively about the applications of behavioral economic principles for the development of new products, technology based products, public policies, and to understand how business and social policy strategies could be modified with a deeper understanding of the effects these principles have on employees and customers.

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

A Reader in Behavioral Economics

A Reader in Behavioral Economics | Bounded Rationality and Beyond | Scoop.it
A Reader in Behavioral Economics...Erik Angner
November 20, 2012
This pdf portfolio contains readings to accompany Erik Angner’s A Course in Behavioral Economics (Basingstoke: Palgrave, 2012). As the title suggests, the book is an introduction to the increasingly influential discipline of behavioral economics: the effort to provide economics with more psychologically plausible foundations. For more information about the book, please see http://www.facebook.com/BehavioralEconomics.
The Reader is organized by book chapter; a complete Table of Contents is provided in a separate file. For copyright reasons, the reader does not contain full-text articles, but rather links to the papers on each publisher’s website. From there, they can be downloaded by anyone with full access. Most research libraries should have full online access to all these works.
To the instructor. Assuming all students have library privileges, as is usual, this Reader can be distributed as is directly to the students. Though it can be edited to suit your needs, it requires no action on your part. This Reader will be updated continuously. I would be most grateful for suggestions for improvement.

EconomicsWikipedia: Economics is the social science that analyzes the production, distribution, and consumption of goods and services. →

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

How to Become an Expert at Anything

How to Become an Expert at Anything | Bounded Rationality and Beyond | Scoop.it
How to become an expert by doing your own research, communicating with like-minded people, engaging with other experts, reading academic articles, putting your knowledge to action, and cultivating an attitude to never stop learning new things.

The Internet along with other technology these days has provided us with more access to knowledge and information than ever before. Due to this, we have no excuse to be ignorant about the things we are passionate about.

In fact, if we use these tools properly and we are willing to dedicate the time and effort, many of us can become a kind of expert on topics and subjects that we may have little to no formal education in.

I’m personally a strong believer in self-education, also known as autodidacticism. I purposely opted out of graduate school because I thought choosing my own curriculum, and embarking on a life-long journey of knowledge, would be more beneficial to me in the long-term (as well as less expensive).........

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

Social preferences in the online laboratory: A randomized experiment

Jérôme Hergueux & Nicolas Jacquemet - 2012

Internet is a very attractive technology for experiments implementation, both in order to reach more diverse and larger samples and as a field of economic research in its own right. This paper reports on an experiment performed both online and in the laboratory, designed so as to strengthen the internal validity of decisions elicited over the Internet. We use the same subject pool, the same monetary stakes and the same decision interface, and randomly assign two group of subjects between the Internet and a traditional University laboratory to compare behavior in a set of social preferences games. This comparison concludes in favor of the reliability of behaviors elicited through the Internet. Our behavioral results contradict the predictions of social distance theory, as we find that subjects allocated to the Internet treatment behave as if they were more altruistic, more trusting, more trustworthy and less risk averse than laboratory subjects. Those findings have practical importance for the growing community of researchers interested in using the Internet as a vehicle for social experiments and bear interesting methodological lessons for social scientists interested in using experiments to research the Internet as a field.

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

My body is fat and my wallet is thin: The link between weight perceptions, weight control and income

D.W.; Johnston, and G.; Lordan - 2012

This paper explores why the poor are more likely to be overweight and obese than the rich. The main aim is to better understand the mechanisms underlying the income-obesity relationship so that effective policy interventions can be developed. Our approach involves analysing data on approximately 9,000 overweight British adults from between 1997 and 2002. We estimate the effect of income on the probability that an overweight individual correctly recognises their overweight status and the effect of income on the probability that an overweight individual attempts to lose weight. Our work finds that low-income individuals are more likely to both misperceive that they are a healthy weight and fail to address their unhealthy weight. Both of these effects are higher for males than females. For example, it is estimated that overweight low-income males are 15%-points less likely to recognize their overweight status than overweight high-income males, and that after controlling for weight perceptions, overweight low-income males are 10%-points less likely to be trying to lose weight. An implication of these results is that more public education on what constitutes overweight and the dangers associated with being overweight is needed, especially in low income neighbourhoods.

more...
No comment yet.