Authors:
- Explains seemingly irrational human decision-making by taking into account our limited ability to process information
- Shows with several examples that optimization under granularity restriction leads to observed human decision-making
- Demonstrates that granularity helps to explain seemingly irrational human decision-making
- Includes supplementary material: sn.pub/extras
Part of the book series: Studies in Systems, Decision and Control (SSDC, volume 99)
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Table of contents (7 chapters)
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Front Matter
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Back Matter
About this book
This book addresses an intriguing question: are our decisions rational? It explains seemingly irrational human decision-making behavior by taking into account our limited ability to process information. It also shows with several examples that optimization under granularity restriction leads to observed human decision-making. Drawing on the Nobel-prize-winning studies by Kahneman and Tversky, researchers have found many examples of seemingly irrational decisions: e.g., we overestimate the probability of rare events.
Our explanation is that since human abilities to process information are limited, we operate not with the exact values of relevant quantities, but with “granules” that contain these values. We show that optimization under such granularity indeed leads to observed human behavior. In particular, for the first time, we explain the mysterious empirical dependence of betting odds on actual probabilities.
This book can be recommended to all students interested in human decision-making, to researchers whose work involves human decisions, and to practitioners who design and employ systems involving human decision-making —so that they can better utilize our ability to make decisions under uncertainty.
Authors and Affiliations
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Department of Computer Science, College of Engineering, University of Texas at El Paso, El Paso, USA
Joe Lorkowski, Vladik Kreinovich
Bibliographic Information
Book Title: Bounded Rationality in Decision Making Under Uncertainty: Towards Optimal Granularity
Authors: Joe Lorkowski, Vladik Kreinovich
Series Title: Studies in Systems, Decision and Control
DOI: https://doi.org/10.1007/978-3-319-62214-9
Publisher: Springer Cham
eBook Packages: Engineering, Engineering (R0)
Copyright Information: Springer International Publishing AG 2018
Hardcover ISBN: 978-3-319-62213-2Published: 12 July 2017
Softcover ISBN: 978-3-319-87260-5Published: 18 August 2018
eBook ISBN: 978-3-319-62214-9Published: 01 July 2017
Series ISSN: 2198-4182
Series E-ISSN: 2198-4190
Edition Number: 1
Number of Pages: IX, 164
Topics: Computational Intelligence, Cognitive Psychology, Artificial Intelligence