Computable Rationality, NUTS, and the Nuclear Leviathan

This paper explores how the Leviathan that projects power through nuclear arms exercises a unique nuclearized sovereignty. In the case of nuclear superpowers, this sovereignty extends to wielding the power to destroy human civilization as we know it across the globe. Nuclearized sovereignty depends on a hybrid form of power encompassing human decision-makers in a hierarchical chain of command, and all of the technical and computerized functions necessary to maintain command and control at every moment of the sovereign's existence: this sovereign power cannot sleep. This article analyzes how the form of rationality that informs this hybrid exercise of power historically developed to be computable. By definition, computable rationality must be able to function without any intelligible grasp of the context or the comprehensive significance of decision-making outcomes. Thus, maintaining nuclearized sovereignty necessarily must be able to execute momentous life and death decisions without the type of sentience we usually associate with ethical individual and collective decisions

The virtues and vices of equilibrium and the future of financial economics

The use of equilibrium models in economics springs from the desire for parsimonious models of economic phenomena that take human reasoning into account. This approach has been the cornerstone of modern economic theory. We explain why this is so, extolling the virtues of equilibrium theory; then we present a critique and describe why this approach is inherently limited, and why economics needs to move in new directions if it is to continue to make progress. We stress that this shouldn't be a question of dogma, but should be resolved empirically. There are situations where equilibrium models provide useful predictions and there are situations where they can never provide useful predictions. There are also many situations where the jury is still out, i.e., where so far they fail to provide a good description of the world, but where proper extensions might change this. Our goal is to convince the skeptics that equilibrium models can be useful, but also to make traditional economists more aware of the limitations of equilibrium models. We sketch some alternative approaches and discuss why they should play an important role in future research in economics.Comment: 68 pages, one figur

An Agent-Based Model of Mortality Shocks, Intergenerational Effects, and Urban Crime

Rational criminals choose crime over lawfulness because it pays better; hence poverty correlates to criminal behavior. This correlation is an insufficient historical explanation. An agent-based model of urban crime, mortality, and exogenous population shocks supplements the standard economic story, closing the gap with an empirical reality that often breaks from trend. Agent decision making within the model is built around a career maximization function, with life expectancy as the key independent variable. Rational choice takes the form of a local information heuristic, resulting in subjectively rational suboptimal decision making. The effects of population shocks are explored using the Crime and Mortality Simulation (CAMSIM), with effects demonstrated to persist across generations. Past social trauma are found to lead to higher crime rates which subsequently decline as the effect degrades, though \'aftershocks\' are often experienced.Agent-Based Model, Crime, Bounded Rationality, Life Expectancy, Rational Choice

Human-Agent Decision-making: Combining Theory and Practice

Extensive work has been conducted both in game theory and logic to model strategic interaction. An important question is whether we can use these theories to design agents for interacting with people? On the one hand, they provide a formal design specification for agent strategies. On the other hand, people do not necessarily adhere to playing in accordance with these strategies, and their behavior is affected by a multitude of social and psychological factors. In this paper we will consider the question of whether strategies implied by theories of strategic behavior can be used by automated agents that interact proficiently with people. We will focus on automated agents that we built that need to interact with people in two negotiation settings: bargaining and deliberation. For bargaining we will study game-theory based equilibrium agents and for argumentation we will discuss logic-based argumentation theory. We will also consider security games and persuasion games and will discuss the benefits of using equilibrium based agents.Comment: In Proceedings TARK 2015, arXiv:1606.0729

The Complexity Era in Economics

This article argues that the neoclassical era in economics has ended and is being replaced by a new era. What best characterizes the new era is its acceptance that the economy is complex, and thus that it might be called the complexity era. The complexity era has not arrived through a revolution. Instead, it has evolved out of the many strains of neoclassical work, along with work done by less orthodox mainstream and heterodox economists. It is only in its beginning stages. The article discusses the work that is forming the foundation of the complexity era, and how that work will likely change the way in which we understand economic phenomena and the economics profession.

A Cellular Automata Simulation of the 1990s Russian Housing Privatization Decision

The study uses a computational approach to study the phenomenon of housing privatization in Russia in the 1990s. As part of the housing reform flats in multi-family buildings were offered to their residents free of payment. Nevertheless rapid mass housing privatization did not take place. While this outcome admits a number of explanations this analysis emphasizes the fact that the environment in which the decision-making households were operating had a high degree of uncertainty and imposed a high information-processing requirement on the decision-makers. Using the bounded rationality paradigm, the study builds a case for a cellular automata simulation of household decision-making in the context of housing privatization reforms in Russia in the 1990s. Cellular automata is then used to simulate a household’s decision to become the owner of its dwelling.cellular automata, complex systems, housing reform, Russia, simulation