Cognitive constraints, contraction consistency, and the satisficing criterion

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Physics of systems with motivation as an interdisciplinary branch of science

The paper discusses the fundamental characteristics distinguishing the natural and social systems from each other. It considers in detail the basic approaches, prospects, and possibilities of constructing mathematical description for social systems as well as develops the appropriate notions required to do this. The main attention is focused on systems with motion treated as a characteristic example of social systems where the development of mathematical description should demonstrate the crucial ideas of fusing natural and social sciences

Comonotonic Independence: The Critical Test between Classical and Rank-Dependent Utility Theories

This article compares classical expected utility (EU) with the more general rank-dependent utility (RDU) models. The difference between the independence condition for preferences of EU and its comonotonic generalization in RDU provides the exact demarcation between EU and rank-dependent models. Other axiomatic differences are not essential. An experimental design is described that tests this difference between independence and comonotonic independence in its most basic form and is robust against violations of other assumptions that may confound the results, in particular the reduction principle and transitivity. It is well known that in the classical counterexamples to EU, comonotonic independence performs better than full-force independence. For our more general choice pairs, however, we find that comonotonic independence does not perform better. This is contrary to our prior expectation and suggests that rank-dependent models, in full generality, do not provide a descriptive improvement over EU. For rank-dependent models to have a future, submodels and choice situations need to be identified for which rank-dependence does contribute descriptively

Unemployment expectations in an agent-based model with education

Why are unemployment expectations of the “man in the street” markedly different from professional forecasts? We present an agent-based model to explain this deep disconnection using boundedly rational agents with different levels of education. A good fit of empirical data is obtained under the assumptions that there is staggered update of information, agents update episodically their estimate and there is a fraction of households who always and stubbornly forecast that the unemployment is going to raise. The model also sheds light on the role of education and suggests that more educated agents update their information more often and less obstinately fixate on the worst possible forecast