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PsyArXiv Preprints | Rationality without optimality: Bounded and ecological rationality from a Marrian perspective
Ecological rationality provides an alternative to the view that rational responses to environmental uncertainty are optimal probabilistic responses. Focusing on the ecological rationality of simple heuristics, critics have enlisted Marr's levels of analysis and the distinction between function and mechanism to argue that the study of ecological rationality addresses the question of how organisms make decisions, but not the question of what constitutes a rational decision and why. The claim is that the insights of ecological rationality are, after the fact, reducible to instances of optimal Bayesian inference and require principles of Bayesian rationality to explain. Here, I respond to these critiques by clarifying that ecological rationality is more than a set of algorithmic conjectures. It is also driven by statistical commitments governing the treatment of unquantifiable uncertainty. This statistical perspective establishes why ecological rationality is distinct from Bayesian optimality, is incompatible with Marr's levels of analysis, and undermines a strict separation of function and mechanism. This argument finds support in Marr's broader but largely overlooked views on information processing systems and Savage's stance on the limits on Bayesian decision theory. Rationality principles make assumptions, and ecological rationality assumes that environmental uncertainty can render optimal probabilistic responses indeterminable.
bayesian  cognitive_science  rational_choice  rationality  critique 
november 2018 by rvenkat
Explaining Preferences from Behavior: A Cognitive Dissonance Approach | The Journal of Politics: Ahead of Print
The standard approach in positive political theory posits that action choices are the consequences of preferences. Social psychology—in particular, cognitive dissonance theory—suggests the opposite: preferences may themselves be affected by action choices. We present a framework that applies this idea to three models of political choice: (1) one in which partisanship emerges naturally in a two-party system despite policy being multidimensional, (2) one in which interactions with people who express different views can lead to empathetic changes in political positions, and (3) one in which ethnic or racial hostility increases after acts of violence. These examples demonstrate how incorporating the insights of social psychology can expand the scope of formalization in political science.

--It is still only a model. Yes, one that systematically corrects and improves on rational choice models but some studies testing their claims would be nice.
political_psychology  social_psychology  behavioral_economics  rational_choice  critique  maya.sen  via:nyhan 
march 2018 by rvenkat
Isomorphism through algorithms: Institutional dependencies in the case of Facebook - Robyn Caplan, danah boyd, 2018
Algorithms and data-driven technologies are increasingly being embraced by a variety of different sectors and institutions. This paper examines how algorithms and data-driven technologies, enacted by an organization like Facebook, can induce similarity across an industry. Using theories from organizational sociology and neoinstitutionalism, this paper traces the bureaucratic roots of Big Data and algorithms to examine the institutional dependencies that emerge and are mediated through data-driven and algorithmic logics. This type of analysis sheds light on how organizational contexts are embedded into algorithms, which can then become embedded within other organizational and individual practices. By investigating technical practices as organizational and bureaucratic, discussions about accountability and decision-making can be reframed.
platform_economics  institutions  algorithms  rational_choice  bureaucracy  cybernetics  platform_studies  dana.boyd 
march 2018 by rvenkat
Why companieis are becoming more left wing, ditching NRA - Business Insider
-- a speculative blog post quality argument that needs serious backing from observational studies... but a competent lazy student friendly article.
rational_choice  dmce  teaching 
march 2018 by rvenkat
Wealth, Slave Ownership, and Fighting for the Confederacy: An Empirical Study of the American Civil War
How did personal wealth affect the likelihood southerners fought for the Confederate Army in the American Civil War? We offer competing accounts for how we should expect individual wealth, in the form of land, and atrociously, in slaves, to affect white men’s decisions to join the Confederate Army. We assemble a dataset on roughly 3.9 million white citizens in Confederate states, and we show that slaveowners were more likely to fight in the Confederate Army than non-slaveowners. To see if these links are causal, we exploit a randomized land lottery in 19th-century Georgia. Households of lottery winners owned more slaves in 1850 and were more likely to have sons who fought in the Confederate Army than were households who did not win the lottery. Our results suggest that for wealthy southerners, the stakes associated with the conflict’s threat to end the institution of slavery overrode the incentives to free-ride and to avoid paying the costs of war

-- very, very counterintuitive to my worldview. Interesting if these results hold up in other conflicts. Anybody studying demographics of East India Company or the subsequent British Army?
economic_history  political_sociology  causal_inference  rational_choice  slavery  civil_war  united_states_of_america  19th_century  dmce  teaching  ?  via:nyhan 
february 2018 by rvenkat
An expressive voting model of anger, hatred, harm and shame | SpringerLink
To consider some political implications of angry voters, we alter the standard expressive model in a fundamental way. One result is that an angry voter with a strong sense of shame at the thought of voting to harm others, may still do so, even when the harm is brutal. Indeed, his willingness to vote for harming others may increase if the proposed harm becomes more severe, even though the angry voter is more “decent” (less willing to harm others) than most of us sometimes are. Several examples are given that are consistent with the most troubling implications of the model. An empirical appendix follows the concluding section which tests the implications of the model indirectly.

--classic rational voter :), class discussion, hw,...?
rational_choice  behavioral_economics  voting  political_science  dmce  teaching  via:noahpinion 
november 2017 by rvenkat
Attention Manipulation and Information Overload
Limits on consumer attention give firms incentives to manipulate prospective buyers’ allocation of attention. This paper models such attention manipulation and shows that it limits the ability of disclosure regulation to improve consumer welfare. Competitive information supply, from firms competing for attention, can reduce consumers’ knowledge by causing information overload. A single firm subjected to a disclosure mandate may deliberately induce such information overload to obfuscate financially relevant information, or engage in product complexification to bound consumers’ financial literacy. Thus, disclosure rules that would improve welfare for agents without attention limitations can prove ineffective for consumers with limited attention. Obfuscation suggests a role for rules that mandate not only the content but also the format of disclosure; however, even rules that mandate “easy-to-understand” formats can be ineffective against complexification, which may call for regulation of product design.
behavioral_economics  information  rationality  rational_choice  computational_complexity  agency  heuristics  dmce  teaching  models_of_behavior  via:sunstein 
october 2017 by rvenkat
From Extreme to Mainstream: How Social Norms Unravel
Social norms are typically thought to be persistent and long-lasting, sometimes surviving through growth, recessions, and regime changes. In some cases, however, they can quickly change. This paper examines the unraveling of social norms in communication when new information becomes available, e.g., aggregated through elections. We build a model of strategic communication between citizens who can hold one of two mutually exclusive opinions. In our model, agents communicate their opinions to each other, and senders care about receivers' approval. As a result, senders are more likely to express the more popular opinion, while receivers make less inference about senders who stated the popular view. We test these predictions using two experiments. In the main experiment, we identify the causal effect of Donald Trump's rise in political popularity on individuals' willingness to publicly express xenophobic views. Participants in the experiment are offered a bonus reward if they authorize researchers to make a donation to an anti-immigration organization on their behalf. Participants who expect their decision to be observed by the surveyor are significantly less likely to accept the offer than those expecting an anonymous choice. Increases in participants' perceptions of Trump's popularity (either through experimental variation or through the “natural experiment” of his victory) eliminate the wedge between private and public behavior. A second experiment uses dictator games to show that participants judge a person less negatively for publicly expressing (but not for privately holding) a political view they disagree with if that person's social environment is one where the majority of people holds that view.
extremism  norms  institutions  rational_choice  polarization  collective_cognition  common_knowledge  political_economy  political_psychology  dmce  teaching 
may 2017 by rvenkat
‘Don't Tell Me What I Can't Do!’ On the Intrinsic Value of Control
For most people, control has some intrinsic value; people care about maintaining it and will pay something to do so. Whenever a private or public institution blocks choices or interferes with agency, some people will rebel, even if exercising control would not result in material benefits or might produce material harms. On the other hand, people sometimes want to relinquish control, because exercising agency is burdensome or costly. This essay explores when rational and boundedly rational people will prefer to maintain or exercise control and when they will prefer to delegate it.

-- nothing new here, but interesting way to use 'value of control' approach to understand frame construction mechanisms.
dmce  teaching  rational_choice  judgment_decision-making  social_behavior  via:sunstein 
february 2017 by rvenkat
Nicola Gennaioli, Yueran Ma, and Andrei Shleifer - Expectations and Investment (2016) | Andrei Shleifer
Gennaioli, Nicola, Yueran Ma, and Andrei Shleifer. 2016. “Expectations and Investment.” NBER Macroeconomics Annual, Vol. 30 (2015): 379-442.
Abstract
Using micro data from Duke University quarterly survey of Chief Financial Officers, we show that corporate investment plans as well as actual investment are well explained by CFOs’ expectations of earnings growth. The information in expectations data is not subsumed by traditional variables, such as Tobin’s Q or discount rates. We also show that errors in CFO expectations of earnings growth are predictable from past earnings and other data, pointing to extrapolative structure of expectations and suggesting that expectations may not be rational. This evidence, like earlier findings in finance, points to the usefulness of data on actual expectations for understanding economic behavior. -- downloaded via iPhone to DBOX
cognition  rational_choice  microeconomics  behavioral_economics  article  cognitive_bias  investment  cognitive_science  downloaded  rational_expectations  corporate_finance  extrapolation  microfoundations  heuristics 
august 2016 by dunnettreader
Bordalo, Pedro, Nicola Gennaioli, and Andrei Shleifer - “Competition for Attention” (2016) Rev of Econ Studies
Bordalo, Pedro, Nicola Gennaioli, and Andrei Shleifer. 2016. “Competition for Attention.” Review of Economic Studies 83 (2): 481-513. -- Abstract
We present a model of market competition in which consumers' attention is drawn to the products' most salient attributes. Firms compete for consumer attention via their choices of quality and price. Strategic positioning of a product affects how all other products are perceived. With this attention externality, depending on the cost of producing quality some markets exhibit “commoditized” price salient equilibria, while others exhibit “de-commoditized” quality salient equilibria. When the costs of quality change, innovation can lead to radical shifts in markets, as in the case of decommoditization of the coffee market by Starbucks. In the context of financial innovation, the model generates the phenomenon of “reaching for yield”. -- downloaded via iPhone to DBOX
behavioral_economics  attention  paywall  consumerism  competition  cognition  article  cognitive_bias  downloaded  prices  rational_choice  commodities  cognitive_science  consumer_demand 
august 2016 by dunnettreader
An Empirical Analysis of Racial Differences in Police Use of Force
This paper explores racial differences in police use of force. On non-lethal uses of force, blacks and Hispanics are more than fifty percent more likely to experience some form of force in interactions with police. Adding controls that account for important context and civilian behavior reduces, but cannot fully explain, these disparities. On the most extreme use of force – officer-involved shootings – we find no racial differences in either the raw data or when contextual factors are taken into account. We argue that the patterns in the data are consistent with a model in which police officers are utility maximizers, a fraction of which have a preference for discrimination, who incur relatively high expected costs of officer-involved shootings.

-- don't really care for the rational choice explanation but it is interesting.

Some critiques of the study (via Noah Smith)
http://rajivsethi.blogspot.com/2016/07/police-use-of-force-notes-on-study.html
inequality  criminal_justice  policing  economics  roland.fryer  rational_choice  game_theory  teaching 
july 2016 by rvenkat
Pedro Bordalo, Nicola Gennaioli, Andrei Shleifer - Diagnostic Expectations and Credit Cycles | NBER - May 2016
NBER Working Paper No. 22266, Issued in May 2016 -- We present a model of credit cycles arising from diagnostic expectations – a belief formation mechanism based on Kahneman and Tversky’s (1972) representativeness heuristic. In this formulation, when forming their beliefs agents overweight future outcomes that have become more likely in light of incoming data. The model reconciles extrapolation and neglect of risk in a unified framework. Diagnostic expectations are forward looking, and as such are immune to the Lucas critique and nest rational expectations as a special case. In our model of credit cycles, credit spreads are excessively volatile, over-react to news, and are subject to predictable reversals. These dynamics can account for several features of credit cycles and macroeconomic volatility. - via DeLong
paper  paywall  business_cycles  Minsky  RBC  financial_system  capital_markets  credit  credit_booms  credit_crunch  rational_expectations  heuristics  rationality-economics  rational_choice  financial_stability  volatility  risk_assessment  interest_rates  spreads  Kindleberger 
may 2016 by dunnettreader
Book Details : Why Civil Resistance Works
For more than a century, from 1900 to 2006, campaigns of nonviolent resistance were more than twice as effective as their violent counterparts in achieving their stated goals. By attracting impressive support from citizens, whose activism takes the form of protests, boycotts, civil disobedience, and other forms of nonviolent noncooperation, these efforts help separate regimes from their main sources of power and produce remarkable results, even in Iran, Burma, the Philippines, and the Palestinian Territories.

Combining statistical analysis with case studies of specific countries and territories, Erica Chenoweth and Maria J. Stephan detail the factors enabling such campaigns to succeed and, sometimes, causing them to fail. They find that nonviolent resistance presents fewer obstacles to moral and physical involvement and commitment, and that higher levels of participation contribute to enhanced resilience, greater opportunities for tactical innovation and civic disruption (and therefore less incentive for a regime to maintain its status quo), and shifts in loyalty among opponents' erstwhile supporters, including members of the military establishment.

Chenoweth and Stephan conclude that successful nonviolent resistance ushers in more durable and internally peaceful democracies, which are less likely to regress into civil war. Presenting a rich, evidentiary argument, they originally and systematically compare violent and nonviolent outcomes in different historical periods and geographical contexts, debunking the myth that violence occurs because of structural and environmental factors and that it is necessary to achieve certain political goals. Instead, the authors discover, violent insurgency is rarely justifiable on strategic grounds.

-- Erica Chenoweth's homepage (http://www.ericachenoweth.com/). Her other book and growing body of work seems pretty interesting as well. Wonder if she cites or uses any of Olson's or Ostyrom's works.

a more recent op-ed

http://www.diplomaticourier.com/nonviolent-resistance-rise/
book  sociology  democracy  civil_disobidience  rationality  rational_choice  people 
may 2016 by rvenkat

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