Archivio per 16 maggio 2015

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Mag
15

It’s hard to make ‘good’ decisions

See on Scoop.itBounded Rationality and Beyond

A small group of business leaders was part of Mint’s Breakfast With CEOs event on 16 April 2015 at ITC Maurya’s Dum Pukht restaurant in Delhi. They were in conversation with a person who is known as the father of behavioural economics—Richard Thaler. The Charles R. Walgreen Distinguished Service Professor of Behavioural Science and Economics at the University of Chicago Booth School of Business and co-author of global bestseller Nudge: Improving Decisions About Health, Wealth and Happinesshas challenged the status quo among Economics academics to prove that the world is not made of Econs, or perfectly rational people analyzing reams of information to perfectly maximize utility, but of Humans, or real people who take irrational decisions and are suscptible to biases. Thaler advocates using ‘nudges’ for good outcomes, or putting in place a choice architecture that induces people to take decisions that are ‘good’ for them. The discussion, moderated by R. Sukumar, editor, Mint, generated a lively conversation about the use of behavioural economics in solving problems in business and policy. 

See on livemint.com

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16
Mag
15

What really drives Economic Growth?

See on Scoop.itBounded Rationality and Beyond
Which is more effective “Austerity” or “Quantitative Easing”?

In nature after an evolutionary collapse, mother-nature will begin to rebuild, and in a normal business cycle so too would an economy.  However in a boom and bust cycle things are not quite so easy!

Disposable Income

The starting point for all of economics is excess.  In a time before money, being able to produce more than one’s own immediate needs lead to the emergence of barter.  But with the introduction of money – which acts both, as a means of exchange, and a store of wealth – “excess productivity and production” could lead to the accumulation of “disposable income”; and it is this disposable income that drives all economies in 2 separate ways

Consumption: disposable income drives trade, and thus economic activity.Investment: disposable income drives innovation, and thus economic complexity.

See on linkedin.com

16
Mag
15

The Great P/E Debate: Are Stocks Overvalued?

See on Scoop.itBounded Rationality and Beyond

Janet Yellen made headlines last week with her comment that stock market valuations “generally are quite high.” The market took note, driving down prices.

Is she right? Are stocks overvalued?

It certainly feels that way to most investors. Stocks are trading at all-time highs and are in the midst of a bull market that has seen the S&P 500 move up more than 200% since mid-2009 lows.

However, investing based upon feelings isn’t usually a very good idea. That’s why we rely so much on statistical models to help us be objective about where market valuations stand at any given point in time. Let’s see what we can uncover.

See on seekingalpha.com

16
Mag
15

Can quantum probability provide a new direction for cognitive modeling?

See on Scoop.itBounded Rationality and Beyond

Abstract: Classical (Bayesian) probability (CP) theory has led to an influential research tradition for modeling cognitive processes. Cognitive scientists have been trained to work with CP principles for so long that it is hard even to imagine alternative ways to formalize probabilities. However, in physics, quantum probability (QP) theory has been the dominant probabilistic approach for nearly 100 years. Could QP theory provide us with any advantages in cognitive modeling as well? Note first that both CP and QP theory share the fundamental assumption that it is possible to model cognition on the basis of formal, probabilistic principles. But why consider a QP approach? The answers are that (1) there are many well-established empirical findings (e.g., from the influential Tversky, Kahneman research tradition) that are hard to reconcile with CP principles; and (2) these same findings have natural and straightforward explanations with quantum principles. In QP theory, probabilistic assessment is often strongly context- and orderdependent, individual states can be superposition states (that are impossible to associate with specific values), and composite systems can be entangled (they cannot be decomposed into their subsystems). All these characteristics appear perplexing from a classical perspective. However, our thesis is that they provide a more accurate and powerful account of certain cognitive processes. We first introduce QP theory and illustrate its application with psychological examples. We then review empirical findings that motivate the use of quantum theory in cognitive theory, but also discuss ways in which QP and CP theories converge. Finally, we consider the implications of a QP theory approach to cognition for human rationality.

See on mypage.iu.edu

16
Mag
15

Bayesian Model Comparison Favors Quantum Over Standard Decision Theory Account of Dynamic Inconsistency

See on Scoop.itBounded Rationality and Beyond

Many paradoxical findings in decision-making that have resisted explanations by standard decision theories have accumulated over the past 50 years. Recent advances based on quantum probability theory have successfully accounted for many of these puzzling findings. Critics, however, claim that quantum probability theory is less constrained than standard probability theory, and hence quantum models only fit better because they are more complex than standard decision models. In this article, for the first time, a Bayesian method was used to quantitatively compare the 2 types of decision models, which is a method that evaluates models with respect to accuracy, parsimony, and robustness. A large experiment was used to compare the best-known models of each type, matching in their numbers of parameters, but possibly differing in the complexity of their functional forms. Surprisingly, the Bayesian model comparison overwhelmingly favored the quantum model, indicating that its success is due to its robust ability to make accurate predictions rather than accidental fits afforded by increased complexity

See on mypage.iu.edu

16
Mag
15

Intuitive Intelligence – the untapped human capacity

See on Scoop.itBounded Rationality and Beyond

Human beings have capabilities beyond thinking and doing. We have the capacity of intuitive intelligence. We have all had experiences where we “sensed” something was going to happen. Well, there is science that validates this is a real capability. Even though the military and other specialized organizations have been using techniques to increase this capacity for decades, it hasn’t made it mainstream, yet.

The Human Sustainability Institute synthesizes human capability and capacity building into our consulting and coaching work. Even though the traditional organization development field remains stigmatized in environmental influences to catalyze change. As pioneers, we have taken the best in class techniques for personal mastery from multiple fields and offer them as tools for leaders and organizations to cultivate their most precious resource, the HUMAN resource.

 

See on linkedin.com




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