(WP 2014-03) Bounded Rationality and Bounded Individuality

This paper argues that since the utility function conception of the individual is derived from standard rationality theory, the view that rationality is bounded suggests that individuality should also be seen as bounded. The meaning of this idea is developed in terms of two ways in which individuality can be said to be bounded, with one bound associated with Kahneman and Tversky’s prospect theory and the ‘new’ behavioral economics and a second bound associated with Simon’s evolutionary thinking and the ‘old’ behavioral economics. The paper then shows how different bounded individuality conceptions operate in nudge economics, agent-based modeling, and social identity theory, explaining these conceptions in terms of how they relate to these two behavioral economics views of bounded rationality. How both the ‘new’ and ‘old’ individuality bounds might then be combined in a single account is briefly explored in connection with Kirman’s Marseille fish market analysis

Proposition structure in framed decision problems: A formal representation.

Framing effects, which may induce decision-makers to demonstrate preference description invariance violation for logically equivalent options varying in semantic emphasis, are an economically significant decision bias and an active area of research. Framing is an issue inter alia for the way in which options are presented in stated-choice studies where (often inadvertent) semantic emphasis may impact on preference responses. While research into both espoused preference effects and its cognitive substrate is highly active, interpretation and explanation of preference anomalies is beset by variation in the underlying structure of problems and latitude for decision-maker elaboration. A formal, general scheme for making transparent the parameter and proposition structure of framed decision stimuli is described. Interpretive and cognitive explanations for framing effects are reviewed. The formalism’s potential for describing extant, generating new stimulus tasks, detailing decision-maker task elaboration. The approach also provides a means of formalising stated-choice response stimuli and provides a metric of decision stimuli complexity. An immediate application is in the structuring of stated-choice test instruments

Cognitive constraints, contraction consistency, and the satisficing criterion

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Simon's Bounded Rationality. Origins and use in economic theory

The paper aims to show how Simon's notion of bounded rationality should be interpreted in the light of its connection with artificial intelligence. This connection points out that bounded rationality is a highly structured concept, and sheds light on several implications of Simon's general views on rationality. Finally, offering three paradigmatic examples, the artic1e presents the view that recent approaches, which refer to Simon's heterodox theory, only partially accept the teachings of their inspirer, splitting bounded rationality from the context of artificl al intelligence.

Context-Aware Information Retrieval for Enhanced Situation Awareness

In the coalition forces, users are increasingly challenged with the issues of information overload and correlation of information from heterogeneous sources. Users might need different pieces of information, ranging from information about a single building, to the resolution strategy of a global conflict. Sometimes, the time, location and past history of information access can also shape the information needs of users. Information systems need to help users pull together data from disparate sources according to their expressed needs (as represented by system queries), as well as less specific criteria. Information consumers have varying roles, tasks/missions, goals and agendas, knowledge and background, and personal preferences. These factors can be used to shape both the execution of user queries and the form in which retrieved information is packaged. However, full automation of this daunting information aggregation and customization task is not possible with existing approaches. In this paper we present an infrastructure for context-aware information retrieval to enhance situation awareness. The infrastructure provides each user with a customized, mission-oriented system that gives access to the right information from heterogeneous sources in the context of a particular task, plan and/or mission. The approach lays on five intertwined fundamental concepts, namely Workflow, Context, Ontology, Profile and Information Aggregation. The exploitation of this knowledge, using appropriate domain ontologies, will make it feasible to provide contextual assistance in various ways to the work performed according to a user’s taskrelevant information requirements. This paper formalizes these concepts and their interrelationships

A canonical theory of dynamic decision-making

Decision-making behavior is studied in many very different fields, from medicine and eco- nomics to psychology and neuroscience, with major contributions from mathematics and statistics, computer science, AI, and other technical disciplines. However the conceptual- ization of what decision-making is and methods for studying it vary greatly and this has resulted in fragmentation of the field. A theory that can accommodate various perspectives may facilitate interdisciplinary working. We present such a theory in which decision-making is articulated as a set of canonical functions that are sufficiently general to accommodate diverse viewpoints, yet sufficiently precise that they can be instantiated in different ways for specific theoretical or practical purposes. The canons cover the whole decision cycle, from the framing of a decision based on the goals, beliefs, and background knowledge of the decision-maker to the formulation of decision options, establishing preferences over them, and making commitments. Commitments can lead to the initiation of new decisions and any step in the cycle can incorporate reasoning about previous decisions and the rationales for them, and lead to revising or abandoning existing commitments. The theory situates decision-making with respect to other high-level cognitive capabilities like problem solving, planning, and collaborative decision-making. The canonical approach is assessed in three domains: cognitive and neuropsychology, artificial intelligence, and decision engineering