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Decision theory and choices: a complexity approach

✍ Scribed by Fortunato Tito Arecchi (auth.), Marisa Faggini, Concetto Paolo Vinci (eds.)


Publisher
Springer-Verlag Mailand
Year
2010
Tongue
English
Leaves
267
Series
New Economic Windows
Edition
1
Category
Library

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✦ Synopsis


In economics agents are assumed to choose on the basis of rational calculations aimed at the maximization of their pleasure or profit. Formally, agents are said to manifest transitive and consistent preferences in attempting to maximize their utility in the presence of several constraints. They operate according to the choice imperative: given a set of alternatives, choose the best. This imperative works well in a static and simplistic framework, but it may fail or vary when 'the best' is changing continuously. This approach has been questioned by a descriptive approach that springing from the complexity theory tries to give a scientific basis to the way in which individuals really choose, showing that those models of human nature is routinely falsified by experiments since people are neither selfish nor rational. Thus inductive rules of thumb are usually implemented in order to make decisions in the presence of incomplete and heterogeneous information sets; errors and biases are the natural counterpart of learning and adapting processes. The papers collected in this volume show that economic agents, individual or aggregate, do not conform to standard economic models, highlighting how a different framework – complexity theory - could help to explain and understand the choice and decision process of economic agent.

✦ Table of Contents


Front Matter....Pages i-xiv
Front Matter....Pages 1-1
Coherence, Complexity and Creativity: the Dynamics of Decision Making....Pages 3-21
Complexity Theoretic Bounded Rationality and Satisficing....Pages 23-36
Optimisation and β€œThoughtful Conjecturing” as Principles of Analytical Guidance in Social Decision Making....Pages 37-63
Front Matter....Pages 65-65
A New Agent-based Tool to Build Artificial Worlds....Pages 67-81
Exploration Modes and Its Impact on Industry Profitability....Pages 83-115
Financial Fragility and Interacting Units: an Exercise....Pages 117-126
Front Matter....Pages 127-127
Using Homogeneous Groupings in Portfolio Management....Pages 129-145
Elman Nets for Credit Risk Assessment....Pages 147-167
Front Matter....Pages 169-169
From Chemical Kinetics to Models of Acquisition of Information: On the Importance of the Rate of Acquisition of Information....Pages 171-182
Thermodynamic-like Approach to Complexity of the Financial Market (in the Light of the Present Financial Crises)....Pages 183-203
A Physicist’s Approach to Phase Controlling Chaotic Economic Models....Pages 205-210
Front Matter....Pages 211-211
A Note on Complaints and Deprivation....Pages 213-219
Predictability of SOC Systems. Technological Extreme Events....Pages 221-234
Ontology Based Risk Management....Pages 235-251

✦ Subjects


Game Theory, Economics, Social and Behav. Sciences;Complex Networks;Economic Systems


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