This volume is a collation of original contributions from the key actors of a new trend in the contemporary theory of knowledge and belief, that we call “dynamic epistemology”. It brings the works of these researchers under a single umbrella by highlighting the coherence of their current themes, and by establishing connections between topics that, up until now, have been investigated independently. It also illustrates how the new analytical toolbox unveils questions about the theory of knowledge, belief, preference, action, and (...) rationality, in a number of central axes in dynamic epistemology: temporal, social, probabilistic and even deontic dynamics. (shrink)

Book Description (Blurb): Cognitive Design for Artificial Minds explains the crucial role that human cognition research plays in the design and realization of artificial intelligence systems, illustrating the steps necessary for the design of artificial models of cognition. It bridges the gap between the theoretical, experimental and technological issues addressed in the context of AI of cognitive inspiration and computational cognitive science. -/- Beginning with an overview of the historical, methodological and technical issues in the field of Cognitively-Inspired Artificial Intelligence, (...) Lieto illustrates how the cognitive design approach has an important role to play in the development of intelligent AI technologies and plausible computational models of cognition. Introducing a unique perspective that draws upon Cybernetics and early AI principles, Lieto emphasizes the need for an equivalence between cognitive processes and implemented AI procedures, in order to realise biologically and cognitively inspired artificial minds. He also introduces the Minimal Cognitive Grid, a pragmatic method to rank the different degrees of biologically and cognitive accuracy of artificial systems in order project and predict their explanatory power with respect to the natural systems taken as source of inspiration. -/- Providing a comprehensive overview of cognitive design principles in constructing artificial minds, this text will be essential reading for students and researchers of artificial intelligence and cognitive science. (shrink)

Communication and content presents a comprehensive and foundational account of meaning based on new versions of situation theory and game theory. The literal and implied meanings of an utterance are derived from first principles assuming little more than the partial rationality of interacting agents. New analyses of a number of diverse phenomena – a wide notion of ambiguity and content encompassing phonetics, syntax, semantics, pragmatics, and beyond, vagueness, convention and conventional meaning, indeterminacy, universality, the role of truth in communication, semantic (...) change, translation, Frege’s puzzle of informative identities – are developed. Communication, speaker meaning, and reference are defined. Frege’s context and compositional principles are generalized and reconciled in a fixed-point principle, and a detailed critique of Grice, several aspects of Lewis, and some aspects of the Romantic conception of meaning are offered. Connections with other branches of linguistics, especially psycholinguistics, sociolinguistics, historical linguistics, and natural language processing, are explored. -/- The book will be of interest to scholars in philosophy, linguistics, artificial intelligence, and cognitive science. It should also interest readers in related fields like literary and cultural theory and the social sciences. (shrink)

According to normative decision theory there exists a principle of procedure invariance which states that a decision maker's preference order should remain the same, independently of which response mode is used. For example, the decision maker should express the same preference independently of whether he or she has to judge or decide. Nevertheless, previous research in behavioral decision making has suggested that judgments and choices yield different preference orders in both the risky and the riskless domain. In the latter, the (...) prominence effect has been demonstrated. The main purpose of the present series of experiments was to test cognitive explanations which account for the prominence effect. One of the explanations provided a psychological account based primarily on decision-strategy compatibility. Two other explanations built on information structuring approaches. In the first one, the general idea was that decision makers differentiate between alternatives by value and belief restructuring. In the second approach, violations of invariance were assumed to be attributed to the information structure of the task which in many cases demand problem simplification. A prominence effect was in most experiments found for both choices and preference ratings. This finding spöke against the strategy compatibility explanation. Instead, the different forms of cognitive restructuring provided a better account. However, none of these provided a single explanation. Yet, the structure compatibility explanation appeared to be the more viable one, in particular of the relation between experimentäl manipulations and response mode outcomes. The predictions of the value-belief restructuring explanation, on the other hand, seemed to be more valid for the prominence effect found in choice than for preference ratings. (shrink)

The phenomenon of altruism extends from the biological realm to the human sociocultural realm. This article sketches a coherent outline of multiple types of altruism of progressively increasing scope that span these two realms and are grounded in an ever-expanding sense of “self.” Discussion of this framework notes difficulties associated with altruism at different levels. It links scientific ideas about the evolution of cooperation and about hierarchical order to perennial philosophical and religious concerns. It offers a conceptual background for inquiry (...) into societal challenges that call for altruistic behavior, especially the challenge of environmental and social sustainability. (shrink)

partial review of Thomas Nagel’s book, Mind and Cosmos: Why the Materialist Neo-Darwinian Conception of Nature Is Almost Certainly False is used to articulate some systems-theoretic ideas about the challenge of understanding subjective experience. The article accepts Nagel’s view that reductionist materialism fails as an approach to this challenge, but argues that seeking an explanation of mind based on emergence is more plausible than seeking one based on pan-psychism, which Nagel favors. However, the article proposes something similar to Nagel’s neutral (...) monism by positing a hierarchy of information processes that spans the domains of matter, life, and mind. As depicted in this hierarchy, subjective experience is emergent, but also continuous with informational phenomena at lower levels. (shrink)

Traditionally, epistemologists have distinguished between epistemic and pragmatic goals. In so doing, they presume that much of game theory is irrelevant to epistemic enterprises. I will show that this is a mistake. Even if we restrict attention to purely epistemic motivations, members of epistemic groups will face a multitude of strategic choices. I illustrate several contexts where individuals who are concerned solely with the discovery of truth will nonetheless face difficult game theoretic problems. Examples of purely epistemic coordination problems and (...) social dilemmas will be presented. These show that there is a far deeper connection between economics and epistemology than previous appreciated. (shrink)

There is a great deal of literature on matching, theoretical, and empirical, concerning stable assignments and mechanisms that achieve them. The starting point of this study is an interesting question about assignment procedures: given a situation where some agents (the senior workers) on one side have a priority status, which changes the classical theory. The core of game may not be stable. We prove the existence of a quasi stable constrained core. This constrained core may not be a lattice but (...) it is a finite and disjoint union of complete lattices that check the properties of the core’s classical assignment game. We study the manipulability questions that derive. (shrink)

This paper examines the existence of strategic solutions to finite normal form games under the assumption that strategy choices can be described as choices among lotteries where players have security- and potential level preferences over lotteries (e.g., Cohen, Theory and Decision, 33, 101–104, 1992, Gilboa, Journal of Mathematical Psychology, 32, 405–420, 1988, Jaffray, Theory and Decision, 24, 169–200, 1988). Since security- and potential level preferences require discontinuous utility representations, standard existence results for Nash equilibria in mixed strategies (Nash, Proceedings of (...) the National Academy of Sciences, 36, 48–49, 1950a, Non-Cooperative Games, Ph.D. Dissertation, Princeton University Press, 1950b) or for equilibria in beliefs (Crawford, Journal of Economic Theory, 50, 127–154, 1990) do not apply. As a key insight this paper proves that non-existence of equilibria in beliefs, and therefore non-existence of Nash equilibria in mixed strategies, is possible in finite games with security- and potential level players. But, as this paper also shows, rationalizable strategies (Bernheim, Econometrica, 52, 1007–1028, 1984, Moulin, Mathematical Social Sciences, 7, 83–102, 1984, Pearce, Econometrica, 52, 1029–1050, 1984) exist for such games. Rationalizability rather than equilibrium in beliefs therefore appears to be a more favorable solution concept for games with security- and potential level players. (shrink)

In this paper, we describe a framework for studying social agents’ individual decision making, that takes account of the environment and social dynamics. We describe a study in which we explored the efficiency of foraging strategies within a group of individuals faced with a resource-limited environment. We investigated to what extent cooperative and non-cooperative behaviors impacted on the survival rates of a population of individuals. In the experiment presented here, we considered two different types of individuals: selfish individuals who gather (...) energy for their own use, and cooperative individuals who share the energy they gather with others, thus reducing their own individual chances of survival. In order to study the trade-off between non-cooperative and cooperative behaviors in a pseudo-realistic two-dimensional environment, we introduced an agent-based modeling and simulation tool called ACACIA-ES, which simulated local interactions and spatial behavior for large numbers of individuals in complex environments. The main result from our simulation was that a group of cooperative individuals displayed better survival strategies than groups of selfish individuals when faced with a variety of environmental pressures; however, it was very unlikely that such cooperative strategies could resist competition from selfish individuals, if the outcome of past social interactions was memorized, even when a very small group of selfish individuals was introduced. (shrink)

This paper has two main parts. In the first part, we motivate a kind of indeterminate, suppositional credences by discussing the prospect for a subjective interpretation of a causal Bayesian network, an important tool for causal reasoning in artificial intelligence. A CBN consists of a causal graph and a collection of interventional probabilities. The subjective interpretation in question would take the causal graph in a CBN to represent the causal structure that is believed by an agent, and interventional probabilities in (...) a CBN to represent suppositional credences. We review a difficulty noted in the literature with such an interpretation, and suggest that a natural way to address the challenge is to go for a generalization of CBN that allows indeterminate credences. In the second part, we develop a decision-theoretic foundation for such indeterminate suppositional credences, by generalizing a theory of coherent choice functions to accommodate some form of act-state dependence. The upshot is a decision-theoretic framework that is not only rich enough to, so to speak, ground the probabilities in a subjectively interpreted causal network, but also interesting in its own right, in that it accommodates both act-state dependence and imprecise probabilities. (shrink)

Theory-of-mind (ToM) involves modeling an individual’s mental states to plan one’s action and to anticipate others’ actions through recursive reasoning that may be myopic (with limited recursion) or predictive (with full recursion). ToM recursion was examined using a series of two-player, sequential-move matrix games with a maximum of three steps. Participants were assigned the role of Player I, controlling the initial and the last step, or of Player II, controlling the second step. Appropriate for the assigned role, participants either anticipated (...) or planned Player II’s strategy at the second step, and then determined Player I’s optimal strategy at the first step. Participants more readily used predictive reasoning as Player II (i.e., planning one’s own move) than as Player I (i.e., anticipating an opponent’s move), although they did not differ when translating reasoning outcome about the second step to optimal action in the first step. Perspective-taking influenced likelihood of predictive reasoning, but it did not affect the rate at which participants acquired it during the experimental block. We conclude that the depth of ToM recursion (related to perspective-taking mechanisms) and rational application of belief–desire to action (instrumental rationality) constitute separate cognitive processes in ToM reasoning. (shrink)

Recent work has formally linked the traditional axiomatisation of incomplete preferences à la Anscombe-Aumann with the theory of desirability developed in the context of imprecise probability, by showing in particular that they are the very same theory. The equivalence has been established under the constraint that the set of possible prizes is finite. In this paper, we relax such a constraint, thus de facto creating one of the most general theories of rationality and decision making available today. We provide the (...) theory with a sound interpretation and with basic notions, and results, for the separation of beliefs and values, and for the case of complete preferences. Moreover, we discuss the role of conglomerability for the presented theory, arguing that it should be a rationality requirement under very broad conditions. (shrink)

We present a novel variant of decision making based on the mathematical theory of separable Hilbert spaces. This mathematical structure captures the effect of superposition of composite prospects, including many incorporated intentions, which allows us to describe a variety of interesting fallacies and anomalies that have been reported to particularize the decision making of real human beings. The theory characterizes entangled decision making, non-commutativity of subsequent decisions, and intention interference. We demonstrate how the violation of the Savage’s sure-thing principle, known (...) as the disjunction effect, can be explained quantitatively as a result of the interference of intentions, when making decisions under uncertainty. The disjunction effects, observed in experiments, are accurately predicted using a theorem on interference alternation that we derive, which connects aversion-to-uncertainty to the appearance of negative interference terms suppressing the probability of actions. The conjunction fallacy is also explained by the presence of the interference terms. A series of experiments are analyzed and shown to be in excellent agreement with a priori evaluation of interference effects. The conjunction fallacy is also shown to be a sufficient condition for the disjunction effect, and novel experiments testing the combined interplay between the two effects are suggested. (shrink)

Since the middle of this century, the dominant prescriptive approach to decision theory has been a deductive viewpoint which is concerned with axioms of rational preference and their consequences. After summarizing important problems with the preference primitive, this paper argues for a constructive approach in which information is the foundation for decision-making. This approach poses comparability of uncertain acts as a question rather than an assumption. It is argued that, in general, neither preference nor subjective probability can be assumed given, (...) and that these need to be generated by using the relevant information available to the decision-agent in a given situation. A specific constructive model is discussed and illustrated with a real example from this viewpoint. (shrink)

Stability definitions for describing human behavior under conflict when coalitions may form are generalized within the Graph Model for Conflict Resolution and algebraic formulations of these definitions are provided to allow computer implementation. The more general definitions of coalitional stabilities relax the assumption of transitive graphs capturing movements under the control of decision makers, either independently or cooperatively, and allow the convenient expansion to the case of coalitions of the four basic individual stabilities consisting of Nash stability, general metarationality, symmetric (...) metarationality, and sequential stability. To permit the various coalitional stabilities to be efficiently calculated and conveniently encoded within a decision support system, algebraic expressions for the coalitional stabilities are provided in this research. Furthermore, a range of the theorems establish the mathematical credibility of employing the innovative algebraic approach to conflict resolution when coalitions are present. Finally, a conflict over the proposed exportation of bulk water from Lake Gisborne within the Canadian Province of Newfoundland and Labrador is modelled and analyzed to illustrate the practical application of the different coalitional stabilities and the strategic insights they provide. (shrink)

Modern microeconomic theory is based on a foundation of ordinal preference relations. Good textbooks stress that cardinal utility functions are artificial constructions of convenience, and that economics does not attribute any meaning to “utils.” However, we argue that despite this official position, in practice mainstream economists rely on techniques that assume the validity of cardinal utility. Doing so has turned mainstream economic theorizing into an exercise of reductionism of objects down to the preferences of ‘ideal type’ subjects.

A square tabular array was introduced by R. C. Punnett in (1907) to visualize systematically and economically the combination of gametes to make genotypes according to Mendel’s theory. This mode of representation evolved and rapidly became standardized as the canonical way of representing like problems in genetics. Its advantages over other contemporary methods are discussed, as are ways in which it evolved to increase its power and efficiency, and responded to changing theoretical perspectives. It provided a natural visual decomposition of (...) a complex problem into a number of inter-related stages. This explains its computational and conceptual power, for one could simply “read off” answers to a wide variety of questions simply from the “right” visual representation of the problem, and represent multiple problems, and multiple layers of problems in the same diagram. I relate it to prior work on the evolution of Weismann diagrams by Griesemer and Wimsatt (What Philosophy of Biology Is, Martinus-Nijhoff, the Hague, 1989), and discuss a crucial change in how it was interpreted that midwifed its success. (shrink)

Richard Levins’ distinction between aggregate, composed and evolved systems acquires new significance as we recognize the importance of mechanistic explanation. Criteria for aggregativity provide limiting cases for absence of organization, so through their failure, can provide rich detectors for organizational properties. I explore the use of failures of aggregativity for the analysis of mechanistic systems in diverse contexts. Aggregativity appears theoretically desireable, but we are easily fooled. It may be exaggerated through approximation, conditions of derivation, and extrapolating from some conditions (...) of decomposition illegtimately to others. Evolved systems particularly may require analyses under alternative complementary decompositions. Exploring these conditions helps us to better understand the strengths and limits of reductionistic methods. (shrink)

University of North Carolina at Greensboro Most approaches to the philosophy of the natural and social sciences are basedon completed scientific investigations. However, there are many importantcases in science in which testing is incomplete. These cases are termed suspendedtrials and are particularly significant in biomedical and allied health fields. Initially,the authors' interest in suspended trials was piqued by a controversialmethod for assisting autistic children known as facilitated communication. Thisarticle examines facilitated communication and other examples of suspendedtrials from the perspective of (...) an economics of science and game theory. Themodel is consistent with recent evolutionary approaches to the philosophy ofthe natural and social sciences and with recent contributions to an economicunderstanding of science. Key Words: clinical trials • innovative therapies • economics of science • suspended trials • facilitated communication • economics of clinical research. (shrink)

The focus of this study is cognitive choice: the selection of one cognitive option (a hypothesis, a theory, or an axiom, for instance) rather than another. The study proposes that cognitive choice should be based on the plausibilities of states posited by rival cognitive options and the utilities of these options' information outcomes. The proposal introduces a form of decision theory that is novel because comparative; it permits many choices among cognitive options to be based on merely comparative plausibilities and (...) utilities. This form of decision theory intersects with recommendations by advocates of decision theory for cognitive choice, on the one hand, and defenders of comparative evaluation of scientific hypotheses and theories, on the other. But it differs from prior decision-theoretic proposals because it requires no more than minimal precision in specifying plausibilities and utilities. And it differs from comparative proposals because none has shown how comparative evaluations can be carried out within a decision-theoretic framework. (shrink)

We propose a formal framework for interpretable machine learning. Combining elements from statistical learning, causal interventionism, and decision theory, we design an idealised explanation game in which players collaborate to find the best explanation for a given algorithmic prediction. Through an iterative procedure of questions and answers, the players establish a three-dimensional Pareto frontier that describes the optimal trade-offs between explanatory accuracy, simplicity, and relevance. Multiple rounds are played at different levels of abstraction, allowing the players to explore overlapping causal (...) patterns of variable granularity and scope. We characterise the conditions under which such a game is almost surely guaranteed to converge on a optimal explanation surface in polynomial time, and highlight obstacles that will tend to prevent the players from advancing beyond certain explanatory thresholds. The game serves a descriptive and a normative function, establishing a conceptual space in which to analyse and compare existing proposals, as well as design new and improved solutions. (shrink)

Necessity and sufficiency are the building blocks of all successful explanations. Yet despite their importance, these notions have been conceptually underdeveloped and inconsistently applied in explainable artificial intelligence, a fast-growing research area that is so far lacking in firm theoretical foundations. In this article, an expanded version of a paper originally presented at the 37th Conference on Uncertainty in Artificial Intelligence, we attempt to fill this gap. Building on work in logic, probability, and causality, we establish the central role of (...) necessity and sufficiency in XAI, unifying seemingly disparate methods in a single formal framework. We propose a novel formulation of these concepts, and demonstrate its advantages over leading alternatives. We present a sound and complete algorithm for computing explanatory factors with respect to a given context and set of agentive preferences, allowing users to identify necessary and sufficient conditions for desired outcomes at minimal cost. Experiments on real and simulated data confirm our method’s competitive performance against state of the art XAI tools on a diverse array of tasks. (shrink)

The current paper is the first to report an experimental study of “Min- and Max-induced rankings” (MMIR), i.e., a family of set rankings that require preferences over sets to be induced from comparison of the best and/or worst elements within those sets. These MMIR do not perform well in predicting preferences over simple sets of monetary outcomes. In this paper, we investigate the axiomatic underpinnings of these models by means of pairwise choice experiments. From this investigation, some important conclusions can (...) be drawn: Axioms that prevent rankings to be based on total-goodness, as well as monotonicity conditions (ensuring that replacing a set element with a better one results in a better set) cannot be refuted. Axioms that rule out any utilization of the relative difference in the values of the outcomes and axioms that prevent rankings to be based on average-goodness are all systematically violated. The Uniform Expected Utility (UEU) criterion seems to meet the apparent shortcomings of the MMIR. Some frequently occurring preference patterns, however, suggest that a significant portion of the participants uses neither a Min- or Max-induced ranking, nor UEU, but some other unspecified decision rule, possibly characterized by the tendency to prefer a diversification of uncertainty. (shrink)

A decision under ‘complete uncertainty’ is one where the decision maker knows the set of possible outcomes for each decision, but cannot assign probabilities to those outcomes. This way, the problem of ranking decisions is reduced to a problem of ranking sets of outcomes. All rankings that have emerged in the literature in this domain imply transitivity. In the current study, transitivity is subjected to an empirical evaluation in two experiments, where subjects are asked to choose between sets of monetary (...) consequences. After analysis with a Bayes Factor, very few violations of transitivity were found. It can be concluded that transitivity seems a plausible condition for the ranking of sets of monetary consequences. (shrink)

Other-perspective taking, distancing, time discounting as well as risk and loss aversion highly affect decision-making. Even though they influence each other, so far these cognitive processes have been unrelated or only partly related to each other in neuroscience. This article proposes a philosophical interpretation of these cognitive processes that is elaborated in the updated theory of Adam Smith’s prudence. The UTSP is inspired by Smith’s account of prudence and is in line with the neuroscientific and behavioral studies on OPT, distancing, (...) time discounting as well as risk and loss aversion. The UTSP represents a framework aiming to interpret and connect these cognitive processes and providing a consistent and empirically sound account of a “Smithianly” prudent style of decision-making. The two pillars of the UTSP are the shift of perspective in space and time and loss aversion. On the basis of this theory, a normative updated theory of Smithian prudence is outlined. The latter is useful for moral philosophy for two reasons: firstly, according to preliminary evidence, it is effective in guiding the agent in decisional contexts in which her well-being is at stake and she can affect other people with her actions. Secondly, since the NUTSP is based on neuroscientific findings on decision-making, it has a sound empirical basis that prevents a source of alienation for the agent. (shrink)

Aconvention is a state in which agents coordinate their activity, not as the result of an explicit agreement, but because their expectations are aligned so that each individual believes that all will act so as to achieve coordination for mutual benefit. Since agents are said to follow a convention if they coordinate without explicit agreement, the notion raises fundamental questions: (1) Why do certain conventions remain stable over time?, and (2) How does a convention emerge in the first place? In (...) a pioneering study, Lewis (1969) addresses these questions by applyingnoncooperative game theory. Lewis defines a convention as aNash coordination equilibrium of a noncooperative game that issalient, that is, it is somehow conspicuous to the agents so that all expect one another to conform with the equilibrium. This paper presents a new game theoretic definition of conventions, which formalizes the notion of salience and which also generalizes the class of conventions Lewis discusses in his work. I define a convention as acorrelated equilibrium (Aumann 1974, 1987) satisfying apublic intentions criterion: Every agent wants his intended action to becommon knowledge. I argue that many conventions correspond to correlated equilibria that are not Nash equilibria, and that this is consistent with Lewis' general viewpoint. Finally, I argue that game theoretic characterizations of convention, such as Lewis' and my own, help to explain a convention's stability, but that a fully satisfactory account of the emergence of convention requires a theory of equilibrium selection beyond the scope of Lewis' work. (shrink)

Psychological empirical research has shown that human choice behavior often violates the assumptions of classical rational choice models. In the last few decades a new research field has emerged which aims to account for the observed choice behavior by resorting to the concepts and mathematical techniques developed in the realm of quantum physics, such as the “mental state vector” defined in a Hilbert space and the interference of quantum probability. This article is a short introduction to the quantum-like approach to (...) the description of cognitive processes. I argue that the mathematical apparatus of quantum physics can account for the observed violations of classical logic and can help develop effective models of psychological and cognitive phenomena. This is illustrated through the so-called conjunction and disjunction fallacies by providing an alternative interpretation of the results of Linda test and Hawaii test. No-fallacy configurations are made possible in the quantum-like approach by sequential modeling of mental states transitions. (shrink)

In this paper we revise Reinforcement Learning and adaptiveness in Multi-Agent Systems from an Evolutionary Game Theoretic perspective. More precisely we show there is a triangular relation between the fields of Multi-Agent Systems, Reinforcement Learning and Evolutionary Game Theory. We illustrate how these new insights can contribute to a better understanding of learning in MAS and to new improved learning algorithms. All three fields are introduced in a self-contained manner. Each relation is discussed in detail with the necessary background information (...) to understand it, along with major references to relevant work. (shrink)

Mind reading (i.e. the ability to infer the mental state of another agent) is taken to be the main cognitive ability required to share an intention and to collaborate. In this paper, I argue that another cognitive ability is also necessary to collaborate: representing others’ and ones’ own goals from a third-person perspective (other-centred or allocentric representation of goals). I argue that allocentric mind reading enables the cognitive ability of goal adoption, i.e. having the goal that another agent’s achieve p (...) because and as long as another agent has that goal that p. Having clarified the relevance of mutual goal adoption for acting jointly, I argue that when an intention is shared between several agents, each individual has an intention in favour of the joint action and one in favour of a joint mode of reasoning. This mode of reasoning is allocentric reasoning. Finally, I elaborate on the consequences of this view for the scientific study of human collaboration. (shrink)

ABSTRACTThe financial crisis of 2008 was unforeseen partly because the academic theories that underpin policy making do not sufficiently account for uncertainty and complexity or learned and evolved human capabilities for managing them. Mainstream theories of decision making tend to be strongly normative and based on wishfully unrealistic “idealized” modeling. In order to develop theories of actual decision making under uncertainty, we need new methodologies that account for how human actors often manage uncertain situations “well enough.” Some possibly helpful methodologies, (...) drawing on digital science, focus on the role of emotions in determining people's choices; others examine how people construct narratives that enable them to act; still others combine qualitative with quantitative data. (shrink)

Iterated admissibility embodies a minimal criterion of rationality in interactions. The epistemic characterization of this solution has been actively investigated in recent times: it has been shown that strategies surviving \ rounds of iterated admissibility may be identified as those that are obtained under a condition called rationality and m assumption of rationality in complete lexicographic type structures. On the other hand, it has been shown that its limit condition, with an infinity assumption of rationality ), might not be satisfied (...) by any state in the epistemic structure, if the class of types is complete and the types are continuous. In this paper we analyze the problem in a different framework. We redefine the notion of type as well as the epistemic notion of assumption. These new definitions are sufficient for the characterization of iterated admissibility as the class of strategies that indeed satisfy \. One of the key methodological innovations in our approach involves defining a new notion of generic types and employing these in conjunction with Cohen’s technique of forcing. (shrink)

The paper argues against an intuitive reading of the Stone-von Neumann theorem as a categoricity result, thereby pointing out that this theorem does not entail any model-theoretical difference between the theories that validate it and those that don't.

For contractarians, justice is the result of a rational bargain. The goal is to show that the rules of justice are consistent with rationality. The two most important bargaining theories of justice are David Gauthier’s and those that use the Nash’s bargaining solution. I argue that both of these approaches are fatally undermined by their reliance on a symmetry condition. Symmetry is a substantive constraint, not an implication of rationality. I argue that using symmetry to generate uniqueness undermines the goal (...) of bargaining theories of justice. (shrink)

This paper argues that instrumental rationality is more permissive than expected utility theory. The most compelling instrumentalist argument in favour of separability, its core requirement, is that agents with non-separable preferences end up badly off by their own lights in some dynamic choice problems. I argue that once we focus on the question of whether agents’ attitudes to uncertain prospects help define their ends in their own right, or instead only assign instrumental value in virtue of the outcomes they may (...) lead to, we see that the argument must fail. Either attitudes to prospects assign non-instrumental value in their own right, in which case we cannot establish the irrationality of the dynamic choice behaviour of agents with non-separable preferences. Or they don’t, in which case agents with non-separable preferences can avoid the problematic choice behaviour without adopting separable preferences. (shrink)

This paper defends revealed preference theory against a pervasive line of criticism, according to which revealed preference methodology relies on appealing to some mental states, in particular an agent’s beliefs, rendering the project incoherent or unmotivated. I argue that all that is established by these arguments is that revealed preference theorists must accept a limited mentalism in their account of the options an agent should be modelled as choosing between. This is consistent both with an essentially behavioural interpretation of preference (...) and with standard revealed preference methodology. And it does not undermine the core motivations of revealed preference theory. (shrink)

Econophysics is a new and exciting cross-disciplinary research field that applies models and modelling techniques from statistical physics to economic systems. It is not, however, without its critics: prominent figures in more mainstream economic theory have criticized some elements of the methodology of econophysics. One of the main lines of criticism concerns the nature of the modelling assumptions and idealizations involved, and a particular target are ‘kinetic exchange’ approaches used to model the emergence of inequality within the distribution of individual (...) monetary income. This article will consider such models in detail, and assess the warrant of the criticisms drawing upon the philosophical literature on modelling and idealization. Our aim is to provide the first steps towards informed mediation of this important and interesting interdisciplinary debate, and our hope is to offer guidance with regard to both the practice of modelling inequality, and the inequality of modelling practice. _1_ Introduction _1.1_ Econophysics and its discontents _1.2_ Against burglar economics _2_ Modelling Inequality _2.1_ Mainstream economic models for income distribution _2.2_ Econophysics models for income distribution _3_ Idealizations in Kinetic Exchange Models _3.1_ Binary interactions _3.2_ Conservation principles _3.3_ Exchange dynamics _ 4 _ Fat Tails and Savings _ 5 _ Evaluation. (shrink)

Prospect theory predicts a four-fold risk attitude, which means that people are risk seeking for low-probability gain and high-probability loss and risk averse for low-probability loss and high-probability gain because they overweight probability when it is low. The four-fold pattern of risk attitude has been supported by several former studies with mainstream industrialized populations but has never previously been tested in a non-industrialized society. In this work, we examined the robustness of the four-fold risk attitude in the DuLong minority ethnicity (...) in China, which is a small society with only 4,000 members that is isolated from modern civilization. We used simple lotteries for gain and loss with different probabilities to elicit the risk attitude of 37 DuLong villagers. Our results support prospect theory predictions in that DuLong people are risk seeking for low-probability gain and risk averse for low-probability loss. However, although they showed a tendency to decrease their degree of risk seeking for gain, their risk attitude did not reverse when the probability of the prospect increased to 50%. In summary, our results suggest a right-shifted weighting function in this non-industrialized small society. The deviation might be caused by the particular living situation of the DuLong people, their sensitivity to monetary payoffs, and the elicitation procedure. (shrink)

Jazz band is a 3 player superadditive game in characteristic function form. Three players have to divide the payoff they can get, while being in a grand coalition, provided their individual and duo coalitions payoffs are known. Assumptions of individual and collective rationality lead to the notion of the core of the game. We discuss offers that cannot readily be refused [OCRR] as the solutions of the game in case of an empty core, when duo coalitions are the best options (...) but only for two out of three players. The experiment shows that even in case of an empty core the most probable results are three-way coalitions and the share of the weakest player usually exceeds his OCRR. The Shapley value is introduced and its fairness is discussed as it lies at the side of the core while, on the other hand, the nucleolus lies exactly at the center of the core. We conclude that, in spite of that, the Shapley value is the best candidate for a fair sharing solution of the jazz band game and other similar games as, opposite to the other values, it is dependent both on individual and duo coalitions payoffs. (shrink)

It is argued that a number of important, and seemingly disparate, types of representation are species of a single relation, here called structural representation, that can be described in detail and studied in a way that is of considerable philosophical interest. A structural representation depends on the existence of a common structure between a representation and that which it represents, and it is important because it allows us to reason directly about the representation in order to draw conclusions about the (...) phenomenon that it depicts. The present goal is to give a general and precise account of structural representation, then to use that account to illuminate several problems of current philosophical interest — including some that do not initially seem to involve representation at all. In particular, it is argued that ontological reductions (like that of the natural numbers to sets), compositional accounts of semantics, several important sorts of mental representation, and (perhaps) possible worlds semantics for intensional logics are all species of structural representation and are fruitfully studied in the framework developed here. (shrink)

It is often claimed that formal and optimizing norms of the standard conception of rationality and the heuristics of the bounded rationality approach are at odds with one another. This claim, I arg...

The Expected Shortfall or Conditional Value-at-Risk (CVaR) has been playing the role of main risk measure in the recent years and paving the way for an enormous number of applications in risk management due to its very intuitive form and important coherence properties. This work aims to explore this measure as a probability-dependent utility functional, introducing an alternative view point for its Choquet Expected Utility representation. Within this point of view, its main preference properties will be characterized and its utility (...) representation provided through local utilities with an explicit dependence on the assessed revenue’s distribution (quantile) function. Then, an intuitive interpretation for the related probability dependence and the piecewise form of such utility will be introduced on an investment pricing context, in which a CVaR maximizer agent will behave in a relativistic way based on his previous estimates of the probability function. Finally, such functional will be extended to incorporate a larger range of risk-averse attitudes and its main properties and implications will be illustrated through examples, such as the so-called Allais Paradox. (shrink)

Applied mathematics often operates by way of shakily rationalizedexpedients that can neither be understood in a deductive-nomological nor in an anti-realist setting.Rather do these complexities, so a recent paper of Mark Wilson argues, indicate some element in ourmathematical descriptions that is alien to the physical world. In this vein the mathematical opportunistopenly seeks or engineers appropriate conditions for mathematics to get hold on a given problem.Honest mathematical optimists, instead, try to liberalize mathematical ontology so as to include all physicalsolutions. Following (...) John von Neumann, the present paper argues that the axiomatization of a scientifictheory can be performed in a rather opportunistic fashion, such that optimism and opportunism appear as twomodes of a single strategy whose relative weight is determined by the status of the field to beinvestigated. Wilson's promising approach may thus be reformulated so as to avoid precarious talk about a physicalworld that is void of mathematical structure. This also makes the appraisal of the axiomatic method inapplied matthematics less dependent upon foundationalist issues. (shrink)

Satisficing is a central concept in both individual and social multiagent decision making. In this paper we first extend the notion of satisficing by formally modeling the tradeoff between costs and decision failure. Second, we extend this notion of “neo”-satisficing into the context of social or multiagent decision making and interaction, and model the social conditioning of preferences in a satisficing framework.

Individual rationality, or doing what is best for oneself, is a standard model used to explain and predict human behavior, and von Neumann–Morgenstern game theory is the classical mathematical formalization of this theory in multiple-agent settings. Individual rationality, however, is an inadequate model for the synthesis of artificial social systems where cooperation is essential, since it does not permit the accommodation of group interests other than as aggregations of individual interests. Satisficing game theory is based upon a well-defined notion of (...) being good enough, and does accommodate group as well as individual interests through the use of conditional preference relationships, whereby a decision maker is able to adjust its preferences as a function of the preferences, and not just the options, of others. This new theory is offered as an alternative paradigm to construct artificial societies that are capable of complex behavior that goes beyond exclusive self interest. (shrink)

Consequentialists often assume rational monism: the thesis that options are always made rationally permissible by the maximization of the selfsame quantity. This essay argues that consequentialists should reject rational monism and instead accept rational pluralism: the thesis that, on different occasions, options are made rationally permissible by the maximization of different quantities. The essay then develops a systematic form of rational pluralism which, unlike its rivals, is capable of handling both the Newcomb problems that challenge evidential decision theory and the (...) unstable problems that challenge causal decision theory. (shrink)

We provide here a general mathematical framework to model attitudes towards ambiguity which uses the formalism of quantum theory as a “purely mathematical formalism, detached from any physical interpretation”. We show that the quantum-theoretic framework enables modelling of the Ellsberg paradox, but it also successfully applies to more concrete human decision-making tests involving financial, managerial and medical decisions. In particular, we elaborate a mathematical representation of various empirical studies which reveal that attitudes of managers towards uncertainty shift from ambiguity seeking (...) to ambiguity aversion, and viceversa, thus exhibiting hope effects and fear effects. The present framework provides a promising direction towards the development of a unified theory of decisions in the presence of uncertainty. (shrink)