ECS1050.08.post - Unit IV Thinking about Thinking 7/23...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Unit IV: Thinking about Thinking Choice and Consequence Fair Play Learning to Cooperate Summary and Conclusions 7/23
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Choice and Consequence The Limits of Homo Economicus Bounded Rationality We Play Some Games Tournament Update
Image of page 2
Schelling’s “Errant Economics” “The Intimate Contest for Self-Command” (1984: 57-82) “The Mind as a Consuming Organ” (328-46) The standard model of rational economic man is: The Limits of Homo Economicus Too simple Assumes time consistent preferences Susceptible to self deception and ‘sour grapes’ Is overly consequentialist Ignores ‘labelling’ and ‘framing’ effects
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Schelling’s “Errant Economics” “The Intimate Contest for Self-Command” (1984: 57-82) “The Mind as a Consuming Organ” (328-46) Schelling’s views are not merely critical (negative); his concerns foreshadow much current research on improving the standard model: The Limits of Homo Economicus Behavioral economics/cognitive psychology Artificial Intelligence Learning models: Inductive reasoning
Image of page 4
The Limits of Homo Economicus Experiments in “behavioral economics” have shown people routinely do not behave the way the standard model predicts: reject profitable bargains they think are unfair do not take full advantage of others when they can punish others even when costly to themselves contribute substantially to public goods behave irrationally when they expect others to behave even more irrationally (Camerer, 1997)
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Bounded Rationality Game theory usually assumes “unbounded,” perfect, or “Olympian” rationality (Simon, 1983). Players: have unlimited memory and computational resources. solve complex, interdependent maximization problems – instantaneously! – subject only to the constraint that the other player is also trying to maximize. But observation and experimentation with human subjects tell us that people don’t actually make decisions this way. A more realistic approach would make more modest assumptions: bounded rationality .
Image of page 6
Game theory usually assumes players are deductively rational.
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern