6,473 research outputs found
Challenges in Complex Systems Science
FuturICT foundations are social science, complex systems science, and ICT.
The main concerns and challenges in the science of complex systems in the
context of FuturICT are laid out in this paper with special emphasis on the
Complex Systems route to Social Sciences. This include complex systems having:
many heterogeneous interacting parts; multiple scales; complicated transition
laws; unexpected or unpredicted emergence; sensitive dependence on initial
conditions; path-dependent dynamics; networked hierarchical connectivities;
interaction of autonomous agents; self-organisation; non-equilibrium dynamics;
combinatorial explosion; adaptivity to changing environments; co-evolving
subsystems; ill-defined boundaries; and multilevel dynamics. In this context,
science is seen as the process of abstracting the dynamics of systems from
data. This presents many challenges including: data gathering by large-scale
experiment, participatory sensing and social computation, managing huge
distributed dynamic and heterogeneous databases; moving from data to dynamical
models, going beyond correlations to cause-effect relationships, understanding
the relationship between simple and comprehensive models with appropriate
choices of variables, ensemble modeling and data assimilation, modeling systems
of systems of systems with many levels between micro and macro; and formulating
new approaches to prediction, forecasting, and risk, especially in systems that
can reflect on and change their behaviour in response to predictions, and
systems whose apparently predictable behaviour is disrupted by apparently
unpredictable rare or extreme events. These challenges are part of the FuturICT
agenda
From Social Simulation to Integrative System Design
As the recent financial crisis showed, today there is a strong need to gain
"ecological perspective" of all relevant interactions in
socio-economic-techno-environmental systems. For this, we suggested to set-up a
network of Centers for integrative systems design, which shall be able to run
all potentially relevant scenarios, identify causality chains, explore feedback
and cascading effects for a number of model variants, and determine the
reliability of their implications (given the validity of the underlying
models). They will be able to detect possible negative side effect of policy
decisions, before they occur. The Centers belonging to this network of
Integrative Systems Design Centers would be focused on a particular field, but
they would be part of an attempt to eventually cover all relevant areas of
society and economy and integrate them within a "Living Earth Simulator". The
results of all research activities of such Centers would be turned into
informative input for political Decision Arenas. For example, Crisis
Observatories (for financial instabilities, shortages of resources,
environmental change, conflict, spreading of diseases, etc.) would be connected
with such Decision Arenas for the purpose of visualization, in order to make
complex interdependencies understandable to scientists, decision-makers, and
the general public.Comment: 34 pages, Visioneer White Paper, see http://www.visioneer.ethz.c
Which heuristics can aid financial-decision-making?
© 2015 Elsevier Inc. We evaluate the contribution of Nobel Prize-winner Daniel Kahneman, often in association with his late co-author Amos Tversky, to the development of our understanding of financial decision-making and the evolution of behavioural finance as a school of thought within Finance. Whilst a general evaluation of the work of Kahneman would be a massive task, we constrain ourselves to a more narrow discussion of his vision of financial-decision making compared to a possible alternative advanced by Gerd Gigerenzer along with numerous co-authors. Both Kahneman and Gigerenzer agree on the centrality of heuristics in decision making. However, for Kahneman heuristics often appear as a fall back when the standard von-Neumann-Morgenstern axioms of rational decision-making do not describe investors' choices. In contrast, for Gigerenzer heuristics are simply a more effective way of evaluating choices in the rich and changing decision making environment investors must face. Gigerenzer challenges Kahneman to move beyond substantiating the presence of heuristics towards a more tangible, testable, description of their use and disposal within the ever changing decision-making environment financial agents inhabit. Here we see the emphasis placed by Gigerenzer on how context and cognition interact to form new schemata for fast and frugal reasoning as offering a productive vein of new research. We illustrate how the interaction between cognition and context already characterises much empirical research and it appears the fast and frugal reasoning perspective of Gigerenzer can provide a framework to enhance our understanding of how financial decisions are made
Agent-based Computational Economics: a Methodological Appraisal
This paper is an overview of "Agent-based Computational Economics (ACE)", an emerging approach to the study of decentralized market economies, in methodological perspective. It summarizes similarities and differences with respect to conventional economic models, outlines the unique methodological characteristics of this approach, and discusses its implications for economic methodology as a whole. While ACE rejoins the reflection on the unintended social consequences of purposeful individual action which is constitutive of economics as a discipline, the paper shows that it complements state-of the-art research in experimental and behavioral economics. In particular, the methods and techniques of ACE have reinforced the laboratory finding that fundamental economic results rely less on rational choice theory than is usually assumed, and have provided insight into the importance of market structures and rules in addition to individual choice. In addition, ACE has enlarged the range of inter-individual interactions that are of interest for economists. In this perspective, ACE provides the economist‘s toolbox with valuable supplements to existing economic techniques rather than proposing a radical alternative. Despite some open methodological questions, it has potential for better integration into economics in the future.Agent-based Computational Economics, Economic Methodology, Experimental Economics.
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