Related papers: Information, Utility & Bounded Rationality
Bounded rationality is an important consideration stemming from the fact that agents often have limits on their processing abilities, making the assumption of perfect rationality inapplicable to many real tasks. We propose an…
Is more information always better? Or are there some situations in which more information can make us worse off? Good (1967) argues that expected utility maximizers should always accept more information if the information is cost-free and…
Rewards typically express desirabilities or preferences over a set of alternatives. Here we propose that rewards can be defined for any probability distribution based on three desiderata, namely that rewards should be real-valued, additive…
We consider stopping problems in which a decision maker (DM) faces an unknown state of nature and decides sequentially whether to stop and take an irreversible action; pay a fee and obtain additional information; or wait without acquiring…
For sensory networks, we determine the rate with which they acquire information about the changing external conditions. Comparing this rate with the thermodynamic entropy production that quantifies the cost of maintaining the network, we…
Most studies of prosumer decision making in the smart grid have focused on single, temporally discrete decisions within the framework of expected utility theory (EUT) and behavioral theories such as prospect theory. In this work, we study…
How much free energy is irreversibly lost during a thermodynamic process? For deterministic protocols, lower bounds on energy dissipation arise from the thermodynamic friction associated with pushing a system out of equilibrium in finite…
The Random Utility Model (RUM) is the leading model to represent the aggregate choices of a heterogeneous population of preference maximizers. We show that if (and only if) preferences are sufficiently uncorrelated, RUM choices can also be…
Physical systems are often simulated using a stochastic computation where different final states result from identical initial states. Here, we derive the minimum energy cost of simulating a complex data set of a general physical system…
Within the well-known framework of financial portfolio optimization, we analyze the existing relationships between the condition of arbitrage and the utility maximization in presence of \emph{insider information}. We assume that, since the…
In financial markets valuable information is rarely circulated homogeneously, because of time required for information to spread. However, advances in communication technology means that the 'lifetime' of important information is typically…
Rational decision making in its linguistic description means making logical decisions. In essence, a rational agent optimally processes all relevant information to achieve its goal. Rationality has two elements and these are the use of…
Quantifying energy flows at nanometer scales promises to guide future research in a variety of disciplines, from microscopic control and manipulation, to autonomously operating molecular machines. A general understanding of the…
We consider information filtering, in which we face a stream of items too voluminous to process by hand (e.g., scientific articles, blog posts, emails), and must rely on a computer system to automatically filter out irrelevant items. Such…
The rate-regulation tradeoff, defined between two objective functions, one penalizing the packet rate and one the regulation cost, can express the fundamental performance bound of networked control systems. However, the characterization of…
While information theory has been introduced to characterize the fundamental limitations of control and filtering for a few decades, the existing information-theoretic methods are indirect and cumbersome for analyzing the limitations of…
Consider a decision maker who is responsible to dynamically collect observations so as to enhance his information about an underlying phenomena of interest in a speedy manner while accounting for the penalty of wrong declaration. Due to the…
To choose between two discrete goods, a consumer pays attention to only those with prices below a threshold. From these, she chooses her most preferred good. We assume consumers in a population have the same preference but may have…
The Landauer's principle, a cornerstone of information thermodynamics, provides a fundamental lower bound on the energetic cost of information erasure in terms of the information content change. However, its traditional formulation is…
This paper focuses on managing the cost of deliberation before action. In many problems, the overall quality of the solution reflects costs incurred and resources consumed in deliberation as well as the cost and benefit of execution, when…