Related papers: Bubbles are rational
In this paper, we make a review on the concepts of rationality across several different fields, namely in economics, psychology and evolutionary biology and behavioural ecology. We review how processes like natural selection can help us…
We extend the study of learning in games to dynamics that exhibit non-asymptotic stability. We do so through the notion of uniform stability, which is concerned with equilibria of individually utility-seeking dynamics. Perhaps surprisingly,…
While traditional economics assumes that humans are fully rational agents who always maximize their expected utility, in practice, we constantly observe apparently irrational behavior. One explanation is that people have limited…
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…
The term rational has become synonymous with maximizing expected payoff in the definition of the best response in Nash setting. In this work, we consider stochastic games in which players engage only once, or at most a limited number of…
The use of equilibrium models in economics springs from the desire for parsimonious models of economic phenomena that take human reasoning into account. This approach has been the cornerstone of modern economic theory. We explain why this…
Driven by recent successes in two-player, zero-sum game solving and playing, artificial intelligence work on games has increasingly focused on algorithms that produce equilibrium-based strategies. However, this approach has been less…
We investigate the fluctuations induced by irrationality in simple games with a large number of competing players. We show that Nash equilibria in such games are ``weakly'' stable: irrationality propagates and amplifies through players'…
We study the design of optimal incentives in sequential processes. To do so, we consider a basic and fundamental model in which an agent initiates a value-creating sequential process through costly investment with random success. If…
We introduce a class of extensive form games where players might not be able to foresee the possible consequences of their decisions and form a model of their opponents which they exploit to achieve a more profitable outcome. We improve…
This paper is an original attempt to understand the foundations of economic reasoning. It endeavors to rigorously define the relationship between subjective interpretations and objective valuations of such interpretations in the context of…
We present an interpretation of the physics of space-times undergoing eternal inflation by repeated nucleation of bubbles. In many cases the physics can be interpreted in terms of the quantum mechanics of a system with a finite number of…
Infinitely repeated games support equilibrium concepts beyond those present in one-shot games (e.g., cooperation in the prisoner's dilemma). Nonetheless, repeated games fail to capture our real-world intuition for settings with many…
We show how solution concepts in games such as Nash equilibrium, correlated equilibrium, rationalizability, and sequential equilibrium can be given a uniform definition in terms of \emph{knowledge-based programs}. Intuitively, all solution…
In this note, we prove the existence of an equilibrium concept, dubbed conditional strategy equilibrium, for non-cooperative games in which a strategy of a player is a function from the other players' actions to her own actions. We study…
A perfectly rational decision-maker chooses the best action with the highest utility gain from a set of possible actions. The optimality principles that describe such decision processes do not take into account the computational costs of…
The rational choice theory is based on this idea that people rationally pursue goals for increasing their personal interests. In most conditions, the behavior of an actor is not independent of the person and others' behavior. Here, we…
In many multiagent settings, such as electric vehicle charging and traffic routing, agents must make decisions in the face of uncertain behavior exhibited by others. Often, this uncertainty arises from multiple sources, such as incomplete…
Entropy serves as a central observable which indicates uncertainty in many chemical, thermodynamical, biological and ecological systems, and the principle of the maximum entropy (MaxEnt) is widely supported in natural science. Recently,…
Making decisions freely presupposes that there is some indeterminacy in the environment and in the decision making engine. The former is reflected on the behavioral changes due to communicating: few changes indicate rigid environments;…