Rational Decision-Making in Business Organizations

Lecture to the memory of Alfred Nobel, December 8, 1978decision making;

Bounded Rational Decision-Making in Changing Environments

A perfectly rational decision-maker chooses the best action with the highest utility gain from a set of possible actions. The optimality principles that describe such decision processes do not take into account the computational costs of finding the optimal action. Bounded rational decision-making addresses this problem by specifically trading off information-processing costs and expected utility. Interestingly, a similar trade-off between energy and entropy arises when describing changes in thermodynamic systems. This similarity has been recently used to describe bounded rational agents. Crucially, this framework assumes that the environment does not change while the decision-maker is computing the optimal policy. When this requirement is not fulfilled, the decision-maker will suffer inefficiencies in utility, that arise because the current policy is optimal for an environment in the past. Here we borrow concepts from non-equilibrium thermodynamics to quantify these inefficiencies and illustrate with simulations its relationship with computational resources.Comment: 9 pages, 2 figures, NIPS 2013 Workshop on Planning with Information Constraint

Intergroup conflict and rational decision making

The literature has been relatively silent about post-conflict processes. However, understanding the way humans deal with post-conflict situations is a challenge in our societies. With this in mind, we focus the present study on the rationality of cooperative decision making after an intergroup conflict, i.e., the extent to which groups take advantage of post-conflict situations to obtain benefits from collaborating with the other group involved in the conflict. Based on dual-process theories of thinking and affect heuristic, we propose that intergroup conflict hinders the rationality of cooperative decision making. We also hypothesize that this rationality improves when groups are involved in an in-group deliberative discussion. Results of a laboratory experiment support the idea that intergroup conflict ¿associated with indicators of the activation of negative feelings (negative affect state and heart rate)¿ has a negative effect on the aforementioned rationality over time and on both group and individual decision making. Although intergroup conflict leads to sub-optimal decision making, rationality improves when groups and individuals subjected to intergroup conflict make decisions after an in-group deliberative discussion. Additionally, the increased rationality of the group decision making after the deliberative discussion is transferred to subsequent individual decision making

Rational decision making in autonomous agents

Making rational decisions is one of the key elements in the design of autonomous agents with successful behavior. Even though there have been many proposals for the support of decision making, most of them can be described either as descriptive or prescriptive. The main goal of our work is to establish the relationship between two of these models, namely bdi and mdps, in order to gain further understanding of how decisions in one model are viewed from the point of view of the other. This goal is important for the development of agent design strategies that unite the best of both worlds.Eje: Inteligencia artificial distribuida, aspectos teóricos de la inteligencia artificial y teoría de computaciónRed de Universidades con Carreras en Informática (RedUNCI

Thermodynamically rational decision making under uncertainty

Inference principles are postulated within statistics, they are not usually derived from any underlying physical constraints on real world observers. An exception to this rule is that in the context of partially observable information engines decision making can be based solely on physical arguments. An inference principle can be derived from minimization of the lower bound on average dissipation [Phys. Rev. Lett., 124(5), 050601], which is achievable with a quasi-static process. Thermodynamically rational decision strategies can be computed algorithmically with the resulting approach. Here, we use this to study an example of binary decision making under uncertainty that is very simple, yet just interesting enough to be non-trivial: observations are either entirely uninformative, or they carry complete certainty about the variable that needs to be known for successful energy harvesting. Solutions found algorithmically can be expressed in terms of parameterized soft partitions of the observable space. This allows for their interpretation, as well as for the analytical calculation of all quantities that characterize the decision problem and the thermodynamically rational strategies.Comment: 7 pages, 3 figure

Rational Decision-Making in Inhibitory Control

An important aspect of cognitive flexibility is inhibitory control, the ability to dynamically modify or cancel planned actions in response to changes in the sensory environment or task demands. We formulate a probabilistic, rational decision-making framework for inhibitory control in the stop signal paradigm. Our model posits that subjects maintain a Bayes-optimal, continually updated representation of sensory inputs, and repeatedly assess the relative value of stopping and going on a fine temporal scale, in order to make an optimal decision on when and whether to go on each trial. We further posit that they implement this continual evaluation with respect to a global objective function capturing the various reward and penalties associated with different behavioral outcomes, such as speed and accuracy, or the relative costs of stop errors and go errors. We demonstrate that our rational decision-making model naturally gives rise to basic behavioral characteristics consistently observed for this paradigm, as well as more subtle effects due to contextual factors such as reward contingencies or motivational factors. Furthermore, we show that the classical race model can be seen as a computationally simpler, perhaps neurally plausible, approximation to optimal decision-making. This conceptual link allows us to predict how the parameters of the race model, such as the stopping latency, should change with task parameters and individual experiences/ability

The evolutionary invisible hand: “Why are we successful? And how do we know we have made an economic error?”

Book review: POSVANC, Matus.  The Evolutionary Invisible Hand - The Problem of Rational Decision Making and Social Ordering over Time. Londres: Palgrave MacmillanBook review: POSVANC, Matus.  The Evolutionary Invisible Hand - The Problem of Rational Decision Making and Social Ordering over Time. Londres: Palgrave MacmillanBook review: POSVANC, Matus.  The Evolutionary Invisible Hand - The Problem of Rational Decision Making and Social Ordering over Time. Londres: Palgrave Macmilla

Quantum-mechanical machinery for rational decision-making in classical guessing game

In quantum game theory, one of the most intriguing and important questions is, "Is it possible to get quantum advantages without any modification of the classical game?" The answer to this question so far has largely been negative. So far, it has usually been thought that a change of the classical game setting appears to be unavoidable for getting the quantum advantages. However, we give an affirmative answer here, focusing on the decision-making process (we call 'reasoning') to generate the best strategy, which may occur internally, e.g., in the player's brain. To show this, we consider a classical guessing game. We then define a one-player reasoning problem in the context of the decision-making theory, where the machinery processes are designed to simulate classical and quantum reasoning. In such settings, we present a scenario where a rational player is able to make better use of his/her weak preferences due to quantum reasoning, without any altering or resetting of the classically defined game. We also argue in further analysis that the quantum reasoning may make the player fail, and even make the situation worse, due to any inappropriate preferences.Comment: 9 pages, 10 figures, The scenario is more improve