Related papers: Diverse Beliefs
Beliefs are central to individual decision-making and societal dynamics, and they are shaped through complex interactions between personal cognition and social environments. Traditional models of belief dynamics often fail to capture the…
Understanding how biological organisms make decisions is of fundamental importance in understanding behavior. Such an understanding within evolutionary game theory so far has been sought by appealing to bounded rationality. Here, we present…
This paper examines the impact of cognitive biases on financial decision-making through a static Bayesian game framework. While traditional economic theory assumes fully rational investors, real-world choices are often shaped by loss…
We discuss conditionalisation for Accept-Desirability models in an abstract decision-making framework, where uncertain rewards live in a general linear space, and events are special projection operators on that linear space. This abstract…
A general theory of innovation and progress in human society is outlined, based on the combat between two opposite forces (conservatism/inertia and speculative herding "bubble" behavior). We contend that human affairs are characterized by…
This paper characterizes equilibrium properties of a broad class of economic models that allow multiple heterogeneous agents to interact in heterogeneous manners across several markets. Our key contribution is a new theorem providing…
Models of opinion dynamics play a major role in various disciplines, including economics, political science, psychology, and social science, as they provide a framework for analysis and intervention. In spite of the numerous mathematical…
A knowledge system S describing a part of real world does in general not contain complete information. Reasoning with incomplete information is prone to errors since any belief derived from S may be false in the present state of the world.…
Prediction problems in finance go beyond estimating the unknown parameters of a model (e.g. of expected returns). This is because such a model would have to include parameters governing the market participants' propensity to change their…
This paper proposes a theory of stock market predictability patterns based on a model of heterogeneous beliefs. In a discrete finite time framework, some agents receive news about an asset's fundamental value through a noisy signal. The…
Financial economic models often assume that investors know (or agree on) the fundamental value of the shares of the firm, easing the passage from the individual to the collective dimension of the financial system generated by the Share…
This paper analyzes a society composed of individuals who have diverse sets of beliefs (or models) and diverse tastes (or utility functions). It characterizes the model selection process of a social planner who wishes to aggregate…
Can one demonstrate quantitative effects of diversity within a system comprised of distinct individuals on the performance of the system as a whole? Assuming that individuals can be different, we develop a model to interpolate between…
Language Models (LMs) have been shown to inherit undesired biases that might hurt minorities and underrepresented groups if such systems were integrated into real-world applications without careful fairness auditing. This paper proposes…
This paper explores the dynamics of learning in a multi-sector general equilibrium model where firms operate under incomplete information about their production returns to scale. Firms iteratively update their beliefs using maximum…
Information theory provides a mathematical foundation to measure uncertainty in belief. Belief is represented by a probability distribution that captures our understanding of an outcome's plausibility. Information measures based on…
The modeling of complex systems such as ecological or socio-economic systems can be very challenging. Although various modeling approaches exist, they are generally not compatible and mutually consistent, and empirical data often do not…
Diversification represents the idea of choosing variety over uniformity. Within the theory of choice, desirability of diversification is axiomatized as preference for a convex combination of choices that are equivalently ranked. This…
This paper presents a plausible reasoning system to illustrate some broad issues in knowledge representation: dualities between different reasoning forms, the difficulty of unifying complementary reasoning styles, and the approximate nature…
We build simple computational models of belief dynamics within the framework of discrete-spin statistical physics models, and explore how suitable they are for understanding and predicting real-world belief change on both the individual and…