Rethinking Behavioral Economics Through Fast And Frugal Heuristics PDF Download
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| Author | : Shabnam Mousavi |
| Publisher | : |
| Total Pages | : 24 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Download Rethinking Behavioral Economics Through Fast-and-Frugal Heuristics Book in PDF, ePub and Kindle
The goal of behavioral economics is to develop models that extend the explanatory and predictive power of economic theory, to address violations of expected utility theory, and to account more realistically for individual choice behavior that does not adhere to calculative rationality. In mainstream behavioral economics, two defining practices have been to list so-called cognitive fallacies and to extend existing expected utility models by adding parameters to account for behavioral factors. Both practices have met their limits. Many cognitive fallacies have been shown to be most likely error on the part of researchers, and adding parameters has been shown to improve fitting but not necessarily the predictive power of the revised utility model. In view of this situation, we review fast-and-frugal heuristics as an alternative vision of behavioral economics that leads to testable process models with superior predictive power. Such a theory satisfies Herbert Simon's criteria of developing process models rather than as-if Bernoulli functions, deals with genuine uncertainty rather than reducing uncertainty to calculable risk, and postulates ecological rather than logical rationality.
| Author | : Shabnam Mousavi |
| Publisher | : Palgrave Macmillan |
| Total Pages | : 240 |
| Release | : |
| Genre | : Business & Economics |
| ISBN | : 9781137570789 |
Download Fast and Frugal Decision Making Book in PDF, ePub and Kindle
We all want more information in order to make better decisions and calculate risk, but oftentimes that information is scarce. This new strategy, based on extensive cognitive and economic research, shows how to make financial decisions through a 'fast and frugal' method.
| Author | : William P. Forbes |
| Publisher | : Academic Press |
| Total Pages | : 278 |
| Release | : 2019-11-15 |
| Genre | : Business & Economics |
| ISBN | : 0128124962 |
Download A Fast and Frugal Finance Book in PDF, ePub and Kindle
A Fast and Frugal Finance: Bridging Contemporary Behavioural Finance and Ecological Rationality adds psychological reality to classical financial reasoning. It shows how financial professionals can reach better and quicker decisions using the ‘fast and frugal’ framework for decision-making, adding dramatically to time and outcome efficiency, while also retaining accuracy. The book provides the reader with an adaptive toolbox of heuristic tools and classification systems to aid real-world decisions. Throughout, financial applications are presented alongside real-world examples to help readers solve established problems in finance, including stock buying and selling decisions, when faced with not only risk but fundamental uncertainty. The book concludes by describing potential solutions to financial problems in the forefront of contemporary debates, and calls for taking psychological insights seriously. Demonstrates how well-constructed ‘fast and frugal’ models can outperform standard models in time and outcome efficiency Focuses on how financial decisions are made in reality, using heuristics, rather than how such decisions should be made Discusses how cognition and the decision-making context interact in producing ‘fast and frugal’ choices that follow ecological rationality Explores the development of decision-making trees in finance to aid in decision-making
| Author | : Roger Frantz |
| Publisher | : Routledge |
| Total Pages | : 435 |
| Release | : 2016-08-05 |
| Genre | : Business & Economics |
| ISBN | : 1317589246 |
Download Routledge Handbook of Behavioral Economics Book in PDF, ePub and Kindle
There is no doubt that behavioral economics is becoming a dominant lens through which we think about economics. Behavioral economics is not a single school of thought but representative of a range of approaches, and uniquely, this volume presents an overview of them. The wide spectrum of international contributors each provides an exploration of a central approach, aspect or topic in behavorial economics. Taken together, the whole volume provides a comprehensive overview of the subject which considers both key developments and future possibilities. Part One presents several different approaches to behavioural economics, including George Katona, Ken Boulding, Harvey Leibenstein, Vernon Smith, Herbert Simon, Gerd Gigerenzer, Daniel Kahneman, and Richard Thaler. This section looks at the origins and development of behavioral economics and compares and contrasts the work of these scholars who have been so influential in making this area so prominent. Part Two presents applications of behavioural economics including nudging; heuristics; emotions and morality; behavioural political economy, education, and economic innovation. The Routledge Handbook of Behavioral Economics is ideal for advanced economics students and faculty who are looking for a complete state-of-the-art overview of this dynamic field.
| Author | : Shabnam Mousavi |
| Publisher | : |
| Total Pages | : 27 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Download Gerd Gigerenzer and Vernon Smith Book in PDF, ePub and Kindle
Behavioral economists use psychological findings to evaluate and revise economic decision theory, to build models that correspond directly to observations of behavior, and to develop descriptive accounts for deviations from principles of neoclassical rationality. One of the main sources of psychological insight is the heuristics and biases research program. This chapter introduces another source of psychological insights, the ecological rationality of fast-and-frugal heuristics, and is organized as follows. First, the chapter juxtaposes psychological (á la Gigerenzer) with economic (á la Smith) views of ecological rationality, thereby connecting fast-and-frugal heuristics to a major source of inspiration and motivation for behavioral economists, namely experimental economics. Then, it briefly reviews a collection of articles illustrating how the successful use of heuristics in business decision making can be understood by using ecological rationality as an investigative framework. Finally, it locates the field of inquiry for behavioral economics on a continuum of scientific problem solving in the interval that Weaver (1948) called organized complexity. Simple heuristics deserve special attention from behavioral economists because they work best in this very interval where exact methods of optimization are structurally unfitting. Put together, these connections, examples, and arguments suggest that mainstream behavioral economics can gain from integrating this less-explored psychological framework. This integration starts by attempting to formulate effective decision rules as fast-and-frugal heuristics and exploring their ecological rationality.
| Author | : Morris Altman |
| Publisher | : Edward Elgar Publishing |
| Total Pages | : 607 |
| Release | : 2017-05-26 |
| Genre | : Business & Economics |
| ISBN | : 1782549595 |
Download Handbook of Behavioural Economics and Smart Decision-Making Book in PDF, ePub and Kindle
This Handbook is a unique and original contribution of over thirty chapters on behavioural economics, examining and addressing an important stream of research where the starting assumption is that decision-makers are for the most part relatively smart or rational. This particular approach is in contrast to a theme running through much contemporary work where individuals’ behaviour is deemed irrational, biased, and error-prone, often due to how people are hardwired. In the smart people approach, where errors or biases occur and when social dilemmas arise, more often than not, improving the decision-making environment can repair these problems without hijacking or manipulating the preferences of decision-makers. This book covers a wide-range of themes from micro to macro, including various sub-disciplines within economics such as economic psychology, heuristics, fast and slow-thinking, neuroeconomics, experiments, the capabilities approach, institutional economics, methodology, nudging, ethics, and public policy.
| Author | : Sanjit Dhami |
| Publisher | : MIT Press |
| Total Pages | : 553 |
| Release | : 2022-07-12 |
| Genre | : Business & Economics |
| ISBN | : 0262369656 |
Download Bounded Rationality Book in PDF, ePub and Kindle
Two leaders in the field explore the foundations of bounded rationality and its effects on choices by individuals, firms, and the government. Bounded rationality recognizes that human behavior departs from the perfect rationality assumed by neoclassical economics. In this book, Sanjit Dhami and Cass R. Sunstein explore the foundations of bounded rationality and consider the implications of this approach for public policy and law, in particular for questions about choice, welfare, and freedom. The authors, both recognized as experts in the field, cover a wide range of empirical findings and assess theoretical work that attempts to explain those findings. Their presentation is comprehensive, coherent, and lucid, with even the most technical material explained accessibly. They not only offer observations and commentary on the existing literature but also explore new insights, ideas, and connections. After examining the traditional neoclassical framework, which they refer to as the Bayesian rationality approach (BRA), and its empirical issues, Dhami and Sunstein offer a detailed account of bounded rationality and how it can be incorporated into the social and behavioral sciences. They also discuss a set of models of heuristics-based choice and the philosophical foundations of behavioral economics. Finally, they examine libertarian paternalism and its strategies of “nudges.”
| Author | : Gerd Gigerenzer |
| Publisher | : Oxford University Press |
| Total Pages | : 432 |
| Release | : 2000-10-12 |
| Genre | : Psychology |
| ISBN | : 0190286768 |
Download Simple Heuristics that Make Us Smart Book in PDF, ePub and Kindle
Simple Heuristics That Make Us Smart invites readers to embark on a new journey into a land of rationality that differs from the familiar territory of cognitive science and economics. Traditional views of rationality tend to see decision makers as possessing superhuman powers of reason, limitless knowledge, and all of eternity in which to ponder choices. To understand decisions in the real world, we need a different, more psychologically plausible notion of rationality, and this book provides it. It is about fast and frugal heuristics--simple rules for making decisions when time is pressing and deep thought an unaffordable luxury. These heuristics can enable both living organisms and artificial systems to make smart choices, classifications, and predictions by employing bounded rationality. But when and how can such fast and frugal heuristics work? Can judgments based simply on one good reason be as accurate as those based on many reasons? Could less knowledge even lead to systematically better predictions than more knowledge? Simple Heuristics explores these questions, developing computational models of heuristics and testing them through experiments and analyses. It shows how fast and frugal heuristics can produce adaptive decisions in situations as varied as choosing a mate, dividing resources among offspring, predicting high school drop out rates, and playing the stock market. As an interdisciplinary work that is both useful and engaging, this book will appeal to a wide audience. It is ideal for researchers in cognitive psychology, evolutionary psychology, and cognitive science, as well as in economics and artificial intelligence. It will also inspire anyone interested in simply making good decisions.
| Author | : Julia Puaschunder |
| Publisher | : Springer Nature |
| Total Pages | : 183 |
| Release | : 2020-10-19 |
| Genre | : Business & Economics |
| ISBN | : 3030543307 |
Download Behavioral Economics and Finance Leadership Book in PDF, ePub and Kindle
This book explores human decision-making heuristics and studies how nudging and winking can help citizens to make rational choices. By applying the behavioral economics approach to political outcomes, it demonstrates how economics can be employed for the greater societal good. It starts with a review of the current literature on human decision-making failures in Europe and North America, presenting the wide range of nudges and winks developed to curb the harmful consequences of human decision-making fallibility. It then discusses the use of mental heuristics, biases and nudges in the finance domain to benefit economic markets by providing clear communication strategies. Lastly, the author proposes clear leadership and followership directives on nudging in the digital age. This book appeals to scholars and policy makers interested in rational decision-making and the use of nudging and winking in the digital age.
| Author | : Riccardo Viale |
| Publisher | : Edward Elgar Publishing |
| Total Pages | : 272 |
| Release | : |
| Genre | : |
| ISBN | : 1788973062 |
Download The Behavioural Finance Revolution Book in PDF, ePub and Kindle
Financial markets are complex. Regulators strive to predict ways in which they can malfunction and create rules to prevent this from happening, yet behavioural impacts are often overlooked. This book explores how behavioural finance can go hand-in-hand with traditional methods to help banks and regulators create better policies. It also demonstrates how the behavioural finance revolution has opened the way to a more integrated approach to the analysis of economic phenomena.
