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Cognitive Economics : An Interdisciplinary Approach - Paul Bourgine

Cognitive Economics

An Interdisciplinary Approach

By: Paul Bourgine (Editor), Jean-Pierre Nadal (Editor)

Hardcover Published: 8th January 2004
ISBN: 9783540404682
Number Of Pages: 479

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The social sciences study knowing subjects and their interactions. A "cog­ nitive turn", based on cognitive science, has the potential to enrich these sciences considerably. Cognitive economics belongs within this movement of the social sciences. It aims to take into account the cognitive processes of individuals in economic theory, both on the level of the agent and on the level of their dynamic interactions and the resulting collective phenomena. This is an ambitious research programme that aims to link two levels of com­ plexity: the level of cognitive phenomena as studied and tested by cognitive science, and the level of collective phenomena produced by the economic in­ teractions between agents. Such an objective requires cooperation, not only between economists and cognitive scientists but also with mathematicians, physicists and computer scientists, in order to renew, study and simulate models of dynamical systems involving economic agents and their cognitive mechanisms. The hard core of classical economics is the General Equilibrium Theory, based on the optimising rationality of the agent and on static concepts of equilibrium, following a point of view systemised in the framework of Game Theory. The agent is considered "rational" if everything takes place as if he was maximising a function representing his preferences, his utility function.

From the reviews:

"`Cognitive Economics' is a newcomer to economic research. ... This book, carrying the new subdiscipline's name as its title, collects 27 articles from fields as diverse as economics, artificial intelligence, logic, psychology and physics. ... the book serves both as an introduction to the field ... as well as a `tool for future research'. The anthology fulfils these two purposes well. ... It will be of interest to a wide range of researchers from cognitive science, economics, the social sciences and AI." (Till Grune-Yanoff, Economics and Philosophy, Vol. 22, 2006)

What is Cognitive Economics?p. 1
Introductionp. 1
Forms of Individual Rationalityp. 3
The Search for Collective Rationalityp. 6
Towards Cognitive Economicsp. 10
Conceptual and Theoretical Basesp. 13
Rational Choice under Uncertaintyp. 15
Introductionp. 15
Expected Utility Theoryp. 16
Violations of Expected Utilityp. 23
Generalizations of Expected Utilityp. 26
Concluding Remarksp. 29
Referencesp. 30
General Equilibriump. 33
The Basic Model: an Exchange Economyp. 35
Walrasian Equilibriump. 38
Proof of the Existence of Equilibrium in the Two Good Casep. 40
Competitive Equilibrium and Pareto Optimalityp. 41
Production in General Equilibriump. 43
The Informational Requirements of the Competitive Mechanismp. 45
Uniqueness and Stability of Equilibriump. 46
Towards More Realistic Modelsp. 48
Conclusionp. 52
Referencesp. 52
The Principles of Game Theoryp. 55
Introductionp. 55
Static Games without Uncertaintyp. 57
Dynamic Games without Uncertaintyp. 62
Static Games with Incomplete Informationp. 68
Dynamic Games with Imperfect Informationp. 73
Referencesp. 78
Rationality and the Experimental Study of Reasoningp. 79
Introductionp. 79
Studies of Reasoning in the Laboratoryp. 79
An Assessment of Performancep. 84
Reassessing Results in the Judgment and Decision-making Domainp. 89
Two kinds of Rationality?p. 90
Conclusionp. 91
Referencesp. 92
Supraclassical Inference without Probabilityp. 95
First Path - Using Additional Background Assumptionsp. 100
Second Path - Restricting the Set of Valuationsp. 102
Third Path - Using Additional Rulesp. 106
Conclusionp. 109
Referencesp. 1ll
From Natural to Artificial Intelligence: Numerical Processing for Cognitive Tasksp. 113
Introductionp. 113
General Presentation and Justificationp. 115
The Evolution Analogyp. 116
Artificial Neural Networksp. 120
A Stochastic Behavioral Approach: Reinforcement Learningp. 124
Referencesp. 128
An Introduction to Statistical Mechanicsp. 131
Introductionp. 131
The Ising Modelp. 132
Probabilities, Information and Entropyp. 137
Probability Laws in Statistical Physicsp. 140
Fluctuations and Thermodynamic Limitp. 149
Systems out of Equilibriump. 151
Numerical Simulationsp. 152
Conclusionp. 154
Referencesp. 155
Spontaneous Symmetry Breaking and the Transition to Disorder in Physicsp. 157
Introductionp. 157
The Ising Modelp. 159
Spontaneous Symmetry Breakingp. 159
Applying an External Fieldp. 162
Creating Local Disorderp. 163
What Happens in the Vicinity of the Critical Point?p. 165
Adding More Disorderp. 166
Conclusionp. 168
Referencesp. 168
Co-Evolutionist Stochastic Dynamics: Emergence of Power Lawsp. 169
Introductionp. 169
The Stochastic Lotka-Volterra-Eigen-Schuster (LVES) Systemp. 172
The Multiplicative Langevin Processp. 174
Analysis of the Stochastic LVES Systemp. 175
Discussionp. 176
Referencesp. 178
Research Areasp. 181
Topics of Cognitive Economicsp. 183
Introductionp. 183
Reasoning Theoryp. 185
Decision Theoryp. 187
Game Theoryp. 190
Economic Theoryp. 193
Conclusionsp. 195
What is a Collective Belief?p. 199
Introductionp. 199
Pure Coordination Games and Schelling Saliencesp. 202
Situated Rationality and the Role of Contextsp. 205
The Autonomy of Group Beliefsp. 208
Conclusionp. 211
Referencesp. 212
Conditional Statements and Directivesp. 213
Conditional Propositionsp. 213
Conditional Directivesp. 222
Summaryp. 225
Guide to Further Readingp. 225
Referencesp. 226
Choice Axioms for a Positive Value of Informationp. 229
Introductionp. 229
Decision Treesp. 231
Positive Value of Information, Consequentialism and the Sure Thing Principlep. 232
A Weaker Axiom on Dynamic Choices for a Positive Value of Informationp. 239
Positive Value of Information without Probabilistic Beliefsp. 240
Concluding Remarksp. 242
Referencesp. 242
Elements of Viability Theory for the Analysis of Dynamic Economicsp. 245
Introductionp. 245
The Mathematical Frameworkp. 249
Characterization of Viability and/or Capturabilityp. 252
Selecting Viable Feedbacksp. 255
Restoring Viabilityp. 257
Referencesp. 264
Stochastic Evolutionary Game Theoryp. 267
Introductionp. 267
Models of Adaptive Learning in Gamesp. 267
Stochastic Stabilityp. 269
Application: Cournot Competitionp. 275
Referencesp. 278
The Evolutionary Analysis of Signal Gamesp. 281
Introductionp. 281
A Sender-Receiver Gamep. 282
A Cheap-talk Gamep. 286
Conclusionp. 290
Referencesp. 291
The Structure of Economic Interaction: Individual and Collective Rationalityp. 293
Introductionp. 293
Individual and Collective Rationalityp. 294
Aggregate and Individual Behavior: An Examplep. 294
Collective Rationality
Different Forms of Interactionp. 300
Herd Behavior in Financial Marketsp. 301
Local Interactionp. 303
Networksp. 303
Misperception of the Interaction Structurep. 306
A Simple Duopoly Gamep. 307
Conclusionp. 309
Referencesp. 310
Experimental Markets: Empirical Data for Theoristsp. 313
Introductionp. 313
Methodology: How is an Experimental Market Constructed?p. 315
The Principal Results from Service Marketsp. 318
The Behavior of Asset Marketsp. 320
The Dynamics of Learning in Strategic Interactionsp. 324
Conclusionp. 327
Referencesp. 330
Social Interactions in Economic Theory: An Insight from Statistical Mechanicsp. 335
Introductionp. 335
Discrete Choice with Social Interactions (I): Individual strategic behavior and rational expectationsp. 337
Discrete Choice with Social Interactions (II): Market price and adaptive expectationsp. 344
Market Organisation with Search and Price Dispersionp. 350
Conclusionp. 353
Referencesp. 354
Adjustment and Social Choicep. 359
Introductionp. 359
The INCA Modelp. 360
Simulation Resultsp. 362
Conclusionsp. 368
Referencesp. 369
From Agent-based Computational Economics Towards Cognitive Economicsp. 371
Introductionp. 371
Multi-agent Systems and Agent-based Computational Economicsp. 372
Basic Concepts of Multi-agent Systems with Network Interactionsp. 375
Individual and Collective Learning and Dynamics in a Discrete choice modelp. 384
Conclusionp. 393
Referencesp. 394
Social Networks and Economic Dynamicsp. 399
Introductionp. 399
Small Worlds in a Knowledge-based Economyp. 401
Influence Networks and Social Learningp. 406
Conclusionp. 414
Referencesp. 415
Coalitions and Networks in Economic Analysisp. 417
Introductionp. 417
Cooperative Solutions to Group and Network Formationp. 419
Noncooperative Models of Groups and Networksp. 421
Applicationsp. 423
Referencesp. 426
Lexiconp. 426
Threshold Phenomena versus Killer Clusters in Bimodal Competion for Standardsp. 429
Introductionp. 429
The Modelp. 430
Discussionp. 432
Finite Size Effectsp. 435
Species Evolutionp. 438
Conclusionsp. 439
Referencesp. 440
Cognitive Efficiency of Social Networks Providing Consumption Advice on Experience Goodsp. 443
Introductionp. 443
The Modelp. 444
Discussionp. 450
Conclusionp. 454
Referencesp. 456
Appendix: convergence analysisp. 456
The Future of Cognitive Economicsp. 463
Indexp. 473
Table of Contents provided by Publisher. All Rights Reserved.

ISBN: 9783540404682
ISBN-10: 3540404686
Audience: Tertiary; University or College
Format: Hardcover
Language: English
Number Of Pages: 479
Published: 8th January 2004
Publisher: Springer-Verlag Berlin and Heidelberg Gmbh & Co. Kg
Country of Publication: DE
Dimensions (cm): 23.5 x 15.5  x 3.18
Weight (kg): 1.93