Related papers: Bounded arbitrage and nearly rational behavior
Perfectly rational decision-makers maximize expected utility, but crucially ignore the resource costs incurred when determining optimal actions. Here we employ an axiomatic framework for bounded rational decision-making based on a…
We characterize Pareto optimality via "near" weighted utilitarian welfare maximization. One characterization sequentially maximizes utilitarian welfare functions using a finite sequence of nonnegative and eventually positive welfare…
From the standpoint of game theory, dominoes is a game that has not received much attention (specially the variety known as draw). It is usually thought that this game is already solved, given general results in game theory. However, the…
In this paper the theory of flexibly-bounded rationality which is an extension to the theory of bounded rationality is revisited. Rational decision making involves using information which is almost always imperfect and incomplete together…
Online bidding is a classic optimization problem, with several applications in online decision-making, the design of interruptible systems, and the analysis of approximation algorithms. In this work, we study online bidding under…
This paper studies a sequential decision problem where payoff distributions are known and where the riskiness of payoffs matters. Equivalently, it studies sequential choice from a repeated set of independent lotteries. The decision-maker is…
We consider a symmetric two-player contest, in which the choice set of effort is constrained. We apply a fundamental property of the payoff function to show that, under standard assumptions, there exists a unique Nash equilibrium in pure…
Randomized higher-order computation can be seen as being captured by a lambda calculus endowed with a single algebraic operation, namely a construct for binary probabilistic choice. What matters about such computations is the probability 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…
We provide new approximation guarantees for greedy low rank matrix estimation under standard assumptions of restricted strong convexity and smoothness. Our novel analysis also uncovers previously unknown connections between the low rank…
We study the exploration problem with approximate linear action-value functions in episodic reinforcement learning under the notion of low inherent Bellman error, a condition normally employed to show convergence of approximate value…
We consider a discrete-time Markov decision process with Borel state and action spaces. The performance criterion is to maximize a total expected {utility determined by unbounded return function. It is shown the existence of optimal…
We focus on one-sided, mixture-based stopping rules for the problem of sequential testing a simple null hypothesis against a composite alternative. For the latter, we consider two cases---either a discrete alternative or a continuous…
We study the recursion-theoretic complexity of Positive Almost-Sure Termination ($\mathsf{PAST}$) in an imperative programming language with rational variables, bounded nondeterministic choice, and discrete probabilistic choice. A program…
The framework of cognitively bounded rationality treats problem solving as fundamentally rational, but emphasises that it is constrained by cognitive architecture and the task environment. This paper investigates a simple decision making…
There is vast empirical evidence that given a set of assumptions on the real-world dynamics of an asset, the European options on this asset are not efficiently priced in options markets, giving rise to arbitrage opportunities. We study…
Bayesian inference has theoretical attractions as a principled framework for reasoning about beliefs. However, the motivations of Bayesian inference which claim it to be the only 'rational' kind of reasoning do not apply in practice. They…
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…
Polymarket is a prediction market platform where users can speculate on future events by trading shares tied to specific outcomes, known as conditions. Each market is associated with a set of one or more such conditions. To ensure proper…
We describe a model that explains possibly indecisive choice behavior, that is, quasi-choices (choice correspondences that may be empty on some menus). The justification is here provided by a proportion of ballots, which are quasi-choices…