Related papers: An Apology for Money
This paper studies the question on whether machines can be rational. It observes the existing reasons why humans are not rational which is due to imperfect and limited information, limited and inconsistent processing power through the brain…
Consumer agency in the digital age is increasingly constrained by systemic barriers and algorithmic manipulation, raising concerns about the authenticity of consumption choices. Nowadays, financial decisions are shaped by external pressures…
Bank failures can stem from runs on otherwise solvent banks or from losses that render banks insolvent, regardless of withdrawals. Disentangling the relative importance of liquidity and solvency in explaining bank failures is central to…
We examine an economy in which interactions are more productive if agents can trust others to refrain from cheating. Some agents are scoundrels, who cheat at every opportunity, while others cheat only if the cost of cheating, a decreasing…
We consider goods that can be shared with k-hop neighbors (i.e., the set of nodes within k hops from an owner) on a social network. We examine incentives to buy such a good by devising game-theoretic models where each node decides whether…
We study the effects on economic activity of a pure temporary change in government debt and the relationship between the debt multiplier and the level of debt in an overlapping generations framework. The debt multiplier is positive but…
Transparency is often deemed critical to enable effective real-world deployment of intelligent systems. Yet the motivations for and benefits of different types of transparency can vary significantly depending on context, and objective…
In my opinion, nothing useful has ever been written on the question in the title, and small is the contribution that I have to offer. I outline an explanation for why there is something rather than nothing, an explanation which, however, I…
Gemini said Lawmakers today face continuous calls to "future proof" the legal system against generative artificial intelligence, algorithmic decision-making, targeted advertising, and all manner of emerging technologies. This Article takes…
The following measures against unemployment are proposed: In the short term, to promote greater income for the poorest sectors. It is shown that this can be paid with the resulting increased production, without losing income to the other…
We relate the strategy sets that a player ends up with after refining his own strategies according to two very different models of rationality: namely, utility maximization and regret minimization.
Social, biological and economic networks grow and decline with occasional fragmentation and re-formation, often explained in terms of external perturbations. We show that these phenomena can be a direct consequence of simple imitation and…
Prices of commodities or assets produce what is called time-series. Different kinds of financial time-series have been recorded and studied for decades. Nowadays, all transactions on a financial market are recorded, leading to a huge amount…
In this paper we consider a scenario where there are several algorithms for solving a given problem. Each algorithm is associated with a probability of success and a cost, and there is also a penalty for failing to solve the problem. The…
The momentum of human spaceflight initiatives continues to build toward Mars, and technological advances may eventually enable the potential for permanent space settlement. Aspirations for sustaining human life in space must be predicated…
People rationalize their past choices, even those that were mistakes in hindsight. We propose a formal theory of this behavior. The theory predicts that sunk costs affect later choices. Its model primitives are identified by choice behavior…
In a previous paper, we applied a field formalism to analyze capital allocation and accumulation within a microeconomic framework of investors and firms. The financial connections were modeled by a field of stakes, representing the links…
The rapid adoption of artificial intelligence (AI) poses new and poorly understood threats to financial stability. We use a game-theoretic model to analyse the stability impact of AI, finding that it amplifies existing financial system…
We model social media as collections of users producing and consuming content. Users value consuming content, but doing so uses up their scarce attention, and hence they prefer content produced by more able users. Users also value receiving…
Connectivity - or the lack thereof - is crucial for the function of many man-made systems, from financial and economic networks over epidemic spreading in social networks to technical infrastructure. Often, connections are deliberately…