An Introduction to Mechanized Reasoning

Mechanized reasoning uses computers to verify proofs and to help discover new theorems. Computer scientists have applied mechanized reasoning to economic problems but -- to date -- this work has not yet been properly presented in economics journals. We introduce mechanized reasoning to economists in three ways. First, we introduce mechanized reasoning in general, describing both the techniques and their successful applications. Second, we explain how mechanized reasoning has been applied to economic problems, concentrating on the two domains that have attracted the most attention: social choice theory and auction theory. Finally, we present a detailed example of mechanized reasoning in practice by means of a proof of Vickrey's familiar theorem on second-price auctions

(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

Identity and Commitment: Sen\u27s Conception of the Individual

This paper develops a conception of personal identity for Amartya Sen’s capability framework that emphasizes his self-scrutinizing aspect of the self and related concept of commitment, and compares this conception to the collective intentionality-based one advanced in Davis (2003c). The paper also distinguishes personal identity and social identity, and contrasts Sen’s framework with recent standard economics’ explanation of social identity in terms of conformity. Sen’s concept of commitment is examined in two formulations, and the later version is related to Bernard Williams’ thinking about identity-conferring commitments. The paper’s concludes by arguing that explaining personal identity as a special capability and possible object of social-economic policy provides one way of resolving the debate over whether the capability framework ought to have a short-list of essential capabilities

Folk Theory of Mind: Conceptual Foundations of Social Cognition

The human ability to represent, conceptualize, and reason about mind and behavior is one of the greatest achievements of human evolution and is made possible by a “folk theory of mind” — a sophisticated conceptual framework that relates different mental states to each other and connects them to behavior. This chapter examines the nature and elements of this framework and its central functions for social cognition. As a conceptual framework, the folk theory of mind operates prior to any particular conscious or unconscious cognition and provides the “framing” or interpretation of that cognition. Central to this framing is the concept of intentionality, which distinguishes intentional action (caused by the agent’s intention and decision) from unintentional behavior (caused by internal or external events without the intervention of the agent’s decision). A second important distinction separates publicly observable from publicly unobservable (i.e., mental) events. Together, the two distinctions define the kinds of events in social interaction that people attend to, wonder about, and try to explain. A special focus of this chapter is the powerful tool of behavior explanation, which relies on the folk theory of mind but is also intimately tied to social demands and to the perceiver’s social goals. A full understanding of social cognition must consider the folk theory of mind as the conceptual underpinning of all (conscious and unconscious) perception and thinking about the social world

Behavioral game theory: Plausible formal models that predict accurately

Many weaknesses of game theory are cured by new models that embody simple cognitive principles, while maintaining the formalism and generality that makes game theory useful. Social preference models can generate team reasoning by combining reciprocation and correlated equilibrium. Models of limited iterated thinking explain data better than equilibrium models do; and they self-repair problems of implausibility and multiplicity of equilibria

(WP 2005-02) Social Identity Strategies in Recent Economics

This paper reviews three distinct strategies in recent economics for using the concept of social identity in the explanation of individual behavior: Akerlof and Kranton’s neoclassical approach, Sen’s commitment approach, and Kirman et al.’s complexity approach. The primary focus is the multiple selves problem and the difficulties associated with failing to explain social identity and personal identity together. The argument of the paper is that too narrow a scope for reflexivity in individual decision making renders the problem intractable, but that enlarging this scope makes it possible to explain personal and social identity together in connection with an individual behavior termed comparative value-objective evaluation. The paper concludes with recommendations for treating the individual objective function as a production function