Related papers: Information, Utility & Bounded Rationality
Time irreversibility in neuronal dynamics has recently been demonstrated to correlate with various indicators of cognitive effort in living systems. Using Landauer's principle, which posits that time-irreversible information processing…
The ideas of thermodynamics have proved fruitful in the setting of quantum information theory, in particular the notion that when the allowed transformations of a system are restricted, certain states of the system become useful resources…
We consider the problem of optimally utilizing $N$ resources, each in an unknown binary state. The state of each resource can be inferred from state-dependent noisy measurements. Depending on its state, utilizing a resource results in…
When robots share the same workspace with other intelligent agents (e.g., other robots or humans), they must be able to reason about the behaviors of their neighboring agents while accomplishing the designated tasks. In practice,…
We study the subtlety of optimal paternalism when a utilitarian planner has the power to design a discrete choice set for a heterogeneous population with bounded rationality. We first consider the planning problem in abstraction. We show…
Despite being optimized, the information processing of biological organisms exhibits significant variability in its complexity and capability. One potential source of this diversity is the limitation of resources required for information…
Assuming that agents' preferences satisfy first-order stochastic dominance, we show how the Expected Utility paradigm can rationalize all optimal investment choices: the optimal investment strategy in any behavioral law-invariant…
This letter exposes a tight connection between the thermodynamic efficiency of information processing and predictive inference. A generalized lower bound on dissipation is derived for partially observable information engines which are…
The von Neumann and Morgenstern theory postulates that rational choice under uncertainty is equivalent to maximization of expected utility (EU). This view is mathematically appealing and natural because of the affine structure of the space…
We consider the problem of maximizing expected utility from terminal wealth in models with stochastic factors. Using martingale methods and a conditioning argument, we determine the optimal strategy for power utility under the assumption…
The performance of an energy system under a real-time pricing mechanism depends on the consumption behavior of its customers, which involves uncertainties. In this paper, we consider a system operator that charges its customers with a…
Collective behaviours are frequently observed to self-organise to criticality. Existing proposals to explain these phenomena are fragmented across disciplines and only partially answer the question. This primer compares the underlying,…
In this article we consider an optimization problem of expected utility maximization of continuous-time trading in a financial market. This trading is constrained by a benchmark for a utility-based shortfall risk measure. The market…
Bounded rationality investigates utility-optimizing decision-makers with limited information-processing power. In particular, information theoretic bounded rationality models formalize resource constraints abstractly in terms of relative…
In this semi-tutorial paper, we first review the information-theoretic approach to account for the computational costs incurred during the search for optimal actions in a sequential decision-making problem. The traditional (MDP) framework…
The study of intelligent systems explains behaviour in terms of economic rationality. This results in an optimization principle involving a function or utility, which states that the system will evolve until the configuration of maximum…
Scientific discovery can be framed as a thermodynamic process in which an agent invests physical work to acquire information about an environment under a finite work budget. Using established results about the thermodynamics of computing,…
Thermodynamics and information have intricate interrelations. Often thermodynamics is considered to be the logical premise to justify that information is physical - through Landauer's principle -, thereby also linking information and…
This paper analyzes a dynamic interaction between a fully rational, privately informed sender and a boundedly rational, uninformed receiver with memory constraints. The sender controls the flow of information, while the receiver designs a…
Information and free-energy maximization are physics principles that provide general rules for an agent to optimize actions in line with specific goals and policies. These principles are the building blocks for designing decision-making…