The traditional way to cope with such uncertainties in economic decision-making is probabilistic, by minimizing the expected value of a welfare loss function under estimated or postulated distributions for the parameters and residuals ...
Author: Gianni Ricci
Publisher: Springer Science & Business Media
This book contains a selection of the papers presented at the symposium on "Decision processes in Economics" which was held in Modena (Italy) on 9-10 October 1989. It coincided with the annual meeting of the italian group on Game Theory; the group is formed by economists, mathematicians, engineers and social scientists. One of the targets of the Meeting, and therefore of the book, is to create an opportunity for having together papers by scientists with an "optimal control" education and papers by theorists on refinement of equilibrium, on repeted games and other topics. These two modes of working on Games are quite different but we think that a unitary approch to Games can be given and this book is an attempt in this direction. Another important and updated issue which is emphisized in the book is the discussion of computation and efficiency of numerical methods in Games. Stochastic differential games are treated in the papers by Basar, Haurie -and Deissemberg. Basar considers a stochastic model of a conflict situation between the monetary policy maker (go vernment) and the responding agent (private sector). Because of asymmetry in the (stochastic) information available the Nash and the Stackelberg games become non standard stochastic diffe rential games. After the discussion of the conditions leading to a solution he provides a numerical example for the proposed game. Haurie considers a game where the observed state changes according to a stochastic jump process.
Hayek's arguments lend support to the hypothesis that individuals tend to be ecologically rational, however much their decision making processes and choices deviate from conventional economic norms. It also focuses attention on the ...
Author: Morris Altman
Publisher: Academic Press
Smart Economic Decision-Making in a Complex World is a fresh and reality-based perspective on decision-making with significant implications for analysis, self-understanding and policy. The book examines the conditions under which smart people generate outcomes that improve their place of work, their household and society. Within this work, the curious reader will find interesting open questions on many fascinating areas of current economic debate, including, the role of realistic assumptions robust model building, understanding how and when non-neoclassical behavior is best practice, why the assumption of smart decision-makers is best to understand and explain our economies and societies, and under what conditions individuals can make the best possible choices for themselves and society at large. Additional sections cover when and how efficiency is achieved, why inefficiencies can persist, when and how consumer welfare is maximized, and what benchmarks should be used to determine efficiency and rationality. Makes the case for 'smart and rational' decision-making as a context-dependent rational process that is framed by socio-cultural environment and conditioned by institutional capacities Explains how incorporation of the 'smart' decision-maker concept into economic thought improves our understanding of how, why and when people generate certain outcomes Explores how economic efficiency can be achieved, individual preferences realized, and social welfare maximized through the use of 'smart and rational' approaches
Conclusion The nonlinear behaviour of economic processes has started, in the last few years, to be described with nonlinear ... Even the simple model presented gives more than just the linear approach in terms of decisions on how to ...
Author: Ionut Purica
Publisher: World Scientific
Using models, developed in one branch of science, to describe similar behaviors encountered in a different one, is the essence of a synergetic approach. A wide range of topics has been developed including Agent-based models, econophysics, socio-economic networks, information, bounded rationality and learning in economics, markets as complex adaptive systems — evolutionary economics, multiscale analysis and modeling, nonlinear dynamics and econometrics, physics of risk, statistical and probabilistic methods in economics and finance. This publication concentrates on process behavior of economic systems and building models that stem from Haken's, Prigogine's, Taylor's work as well as from nuclear physics models. Contents:Introduction: Reasons for Writing this Book, a Decision Theory ApproachNonlinear Models for the Labour MarketSecond Order Effects in Population MigrationCities: Reactors for Economic TransactionsConsiderations on the Reform in the Power Sector (Avoiding Chaos in the Path to an Optimal Market Structure)A Model of Nonlinear Dynamics in the Implementation of Decisions for the Evolution of Energy TechnologiesNonlinear Effects in Knowledge ProductionInstitutional Structures as Benard–Taylor ProcessesOscillatory Processes in Economic SystemsFinal Thoughts on a Different Way of Looking at Economic Process Readership: Advanced undergraduates, graduate students and researchers in applied mathematics and physics, and economics. Keywords:Bifurcation Theory;Nonlinear Migration;Economic Transaction;Energy Market;Planck Equation;Lorentz Transform;Berard-Taylor Dynamically Stable Processes;Complexity
and they focus on depicting the decision process as faced by an individual decision maker (for example, Nicosia 1966; Howard and Sheth 1969; Borcherding 1983; Kroeber-Riel 1992; Engel et al. 1993, 2007). The framework offered in Figure ...
Author: Morris Altman
Publisher: Edward Elgar Publishing
This Handbook is a unique and original contribution of over thirty chapters on behavioural economics, examining and addressing an important stream of research where the starting assumption is that decision-makers are for the most part relatively smart or rational. This particular approach is in contrast to a theme running through much contemporary work where individuals’ behaviour is deemed irrational, biased, and error-prone, often due to how people are hardwired. In the smart people approach, where errors or biases occur and when social dilemmas arise, more often than not, improving the decision-making environment can repair these problems without hijacking or manipulating the preferences of decision-makers. This book covers a wide-range of themes from micro to macro, including various sub-disciplines within economics such as economic psychology, heuristics, fast and slow-thinking, neuroeconomics, experiments, the capabilities approach, institutional economics, methodology, nudging, ethics, and public policy.
decision theory needs to be supplemented by a more general " cognitive decision theory , " which grounds decision - making in the underlying cognitive mechanisms that produce choice behaviour . Implications for Models of Economic ...
Author: Klaus P. Hofmann
Publisher: Nova Publishers
In a fast-moving world, the necessity of making decisions, and preferably good ones, has become even more difficult. One reason is the variety and number of choices perhaps available which often are not presented or understood. Alternatives are often unclear and complex paths to them confusing and misleading. Thus the process of decision making itself requires analysis on an ongoing basis. Decision making is often made based on cultural factors whereas the best alternative might be quite different. The subject touches ethics aspects as well as psychological considerations. This book presents important research on the psychology of decision making related to economics, business and finance.
An Encyclopedia of Behavioral Economics Morris Altman. relIgIon And deCIsIon mAKIng also found that people exhibit relative thinking when they consider differentiated goods or services that differ in price and quality.
Author: Morris Altman
The first and only encyclopedia to focus on the economic and financial behaviors of consumers, investors, and organizations, including an exploration of how people make good—and bad—economic decisions. • Contains an informative introductory essay that familiarizes students with the various aspects of behavioral economics • Provides a list of additional readings for those interested in learning more about the topic • Includes cross-references in each entry to help readers make connections between related topics • Defines key terms that are likely to be unfamiliar to those without advance knowledge of the subject • Helps readers identify and study particular entry categories through accompanying Topic Finders
In the last two decades research carried out jointly by economists, psychologists and neuroscientists has flourished, focusing the analysis on mental and cognitive processes involved in economic choices and decisions.
Author: Alessandro Innocenti
In the last two decades there has been a flourishing research carried out jointly by economists, psychologists and neuroscientists. This meltdown of competences has lead towards original approaches to investigate the mental and cognitive mechanisms involved in the way the economic agent collects, processes and uses information to make choices. This research field involves a new kind of scientist, trained in different disciplines, familiar in managing experimental data, and with the mathematical foundations of decision making. The ultimate goal of this research is to open the black-box to understandthe behavioural and neural processes through which humans set preferences and translate these behaviours into optimal choices. This volume intends to bring forward new results and fresh insights into this matter.
The results of this study could: • Provide valuable information regarding decision-making tools for strategic ... Facilitate discussions on the environmental matter; • Increase public awareness of environmental/social/economic effects ...
Author: Aldo G. S. Ventre
The book provides a comprehensive and timely report on the topic of decision making and decision analysis in economics and the social sciences. The various contributions included in the book, selected using a peer review process, present important studies and research conducted in various countries around the globe. The majority of these studies are concerned with the analysis, modeling and formalization of the behavior of groups or committees that are in charge of making decisions of social and economic importance. Decisions in these contexts have to meet precise coherence standards and achieve a significant degree of sharing, consensus and acceptance, even in uncertain and fuzzy environments. This necessitates the confluence of several research fields, such as foundations of social choice and decision making, mathematics, complexity, psychology, sociology and economics. A large spectrum of problems that may be encountered during decision making and decision analysis in the areas of economics and the social sciences, together with a broad range of tools and techniques that may be used to solve those problems, are presented in detail in this book, making it an ideal reference work for all those interested in analyzing and implementing mathematical tools for application to relevant issues involving the economy and society.