Deliberately Stochastic∗
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1 Uncertainty
Econ 206: Decisions Christopher P. Chambers Econ 304 Monday 4:00-7:00 This course is on economic decision making and the empirical content of economic models. The approach will be to understand when choice behavior is consistent with some economic model of decision making. Topics covered will include classical and modern choice theory, as well as the theory of decisions (the theory of behavior under uncertainty). Other topics include the empirical content of classical behavioral models (say, the work extending Afriat). The focus here is on understanding what we can say with a given model and observable primitives (usually some form of choice). Many (difficult) open questions exist on the empirical content of classical models of decision and game theory. My plan is to distribute a set of notes (co-authored with Federico Echenique) on the subject. Below is a partial list of readings. I obviously don't plan to cover these all. Grades will be based on attendance and in-class presentations. 1 Uncertainty Useful books L.J. Savage. The foundations of statistics. Dover Pubns, 1972 D.M. Kreps. Notes on the Theory of Choice. Perseus Books, 1988 I. Gilboa. Theory of decision under uncertainty. Cambridge University Press, 2009 Subjective probability and a few generalizations F.J. Anscombe and R.J. Aumann. A definition of subjective probability. Annals of mathematical statistics, pages 199{205, 1963 I. Gilboa and D. Schmeidler. Maxmin expected utility with non-unique prior. Journal of Mathematical Economics, 1989 D. Schmeidler. Subjective probability and expected utility without additivity. Econo- metrica: Journal of the Econometric Society, pages 571{587, 1989 P. -
Neuroeconomics and the Governance of Choice in Time
Social Studies of Science 41(4) 515–538 The shortsighted brain: © The Author(s) 2011 Reprints and permission: sagepub. Neuroeconomics and the co.uk/journalsPermissions.nav DOI: 10.1177/0306312710397689 governance of choice in time sss.sagepub.com Natasha Dow Schüll Program in Science, Technology & Society, MIT, Cambridge, MA, USA Caitlin Zaloom Department of Social & Cultural Analysis, NYU, New York, NY, USA Abstract The young field of neuroeconomics converges around behavioral deviations from the model of the human being as Homo economicus, a rational actor who calculates his choices to maximize his individual satisfaction. In a historical moment characterized by economic, health, and environmental crises, policymakers have become increasingly concerned about a particular deviation for which neuroeconomics offers a biological explanation: Why do humans value the present at the expense of the future? There is contentious debate within the field over how to model this tendency at the neural level. Should the brain be conceptualized as a unified decision-making apparatus, or as the site of conflict between an impetuous limbic system at perpetual odds with its deliberate and provident overseer in the prefrontal cortex? Scientific debates over choice-making in the brain, we argue, are also debates over how to define the constraints on human reason with which regulative strategies must contend. Drawing on ethnographic and archival research, we explore how the brain and its treatment of the future become the contested terrain for distinct visions of governmental intervention into problems of human choice-making. Keywords economics, epistemology, governance, liberalism, neuroeconomics, neuroscience, policy, rationality An undergraduate in jeans and a ponytail doffs her winter parka and climbs onto the bed of an fMRI [functional magnetic resonance imaging] machine. -
The Case for Mindless Economics†
The Case for Mindless Economics† Faruk Gul and Wolfgang Pesendorfer Princeton University November 2005 Abstract Neuroeconomics proposes radical changes in the methods of economics. This essay dis- cusses the proposed changes in methodology, together with the the neuroeconomic critique of standard economics. We do not assess the contributions or promise of neuroeconomic research. Rather, we offer a response to the neuroeconomic critique of standard economics. † This research was supported by grants from the National Science Foundation. We thank Drew Fudenberg and Philipp Sadowski for helpful comments and suggestions. 1. Introduction Neuroeconomics proposes radical changes in the methods of economics. This essay dis- cusses the proposed changes in methodology, together with the the neuroeconomic critique of standard economics. Our definition of neuroeconomics includes research that makes no specific reference to neuroscience and is traditionally referred to as psychology and eco- nomics.Weidentifyneuroeconomicsasresearch that implicitly or explicitly makes either of the following two claims: Assertion I: Psychological and physiological evidence (such as descriptions of hedonic states and brain processes) are directly relevant to economic theories. In particular, they can be used to support or reject economic models or even economic methodology. Assertion II: What makes individuals happy (‘true utility’) differs from what they choose. Economic welfare analysis should use true utility rather than the utilities governing choice (‘choice utility’).