Bounded Rationality In Decision Making Under Uncertainty Towards Optimal Granularity
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Bounded Rationality in Decision Making Under Uncertainty: Towards Optimal Granularity
This book addresses an intriguing question: are our decisions rational? It explains seemingly irrational human decision-making behavior by taking into account our limited ability to process information. It also shows with several examples that optimization under granularity restriction leads to observed human decision-making. Drawing on the Nobel-prize-winning studies by Kahneman and Tversky, researchers have found many examples of seemingly irrational decisions: e.g., we overestimate the probability of rare events. Our explanation is that since human abilities to process information are limited, we operate not with the exact values of relevant quantities, but with “granules” that contain these values. We show that optimization under such granularity indeed leads to observed human behavior. In particular, for the first time, we explain the mysterious empirical dependence of betting odds on actual probabilities. This book can be recommended to all students interested in human decision-making, to researchers whose work involves human decisions, and to practitioners who design and employ systems involving human decision-making —so that they can better utilize our ability to make decisions under uncertainty.
Advances in Engineering Management, Innovation, and Sustainability
Author: James Olabode Bamidele Rotimi
language: en
Publisher: Springer Nature
Release Date: 2024-07-09
This book contains a selection of papers from the 13th International Conference on Engineering, Project, and Production Management (EPPM) held in Auckland, New Zealand from 29 November to 1 December 2023. The conference was organized by the School of Built Environment, Massey University in collaboration with the EPPM Association. The book comprises of quality-assured theoretical discussions, data analysis, case studies, and industry practices, presented by global researchers and practitioners. The conference theme was “Creating capacity and capability: re-energizing supply chain for sustainable management of projects and productions in engineering,” and this volume focuses on papers related to engineering management, innovation, and sustainability. The papers are comprehensive, multidisciplinary, and advanced, and will be of interest to researchers and practitioners from various industries seeking the latest updates on the fields of engineering, project, and production management.
Decision Making Under Uncertainty and Constraints
This book shows, on numerous examples, how to make decisions in realistic situations when we have both uncertainty and constraints. In most these situations, the book's emphasis is on the why-question, i.e., on a theoretical explanation for empirical formulas and techniques. Such explanations are important: they help understand why these techniques work well in some cases and not so well in others, and thus, help practitioners decide whether a technique is appropriate for a given situation. Example of applications described in the book ranges from science (biosciences, geosciences, and physics) to electrical and civil engineering, education, psychology and decision making, and religion—and, of course, include computer science, AI (in particular, eXplainable AI), and machine learning. The book can be recommended to researchers and students in these application areas. Many of the examples use general techniques that can be used in other application areas as well, so it is also useful for practitioners and researchers in other areas who are looking for possible theoretical explanations of empirical formulas and techniques.