Mastodawn

The Legacy of Daniel Kahneman https://ejpe.org/journal/article/view/1075/753
by Gerd Gigerenzer
#BoundedRationality
#economics #Psychology #heuristics #Biases #statisticalThinking

View of The Legacy of Daniel Kahneman:

Dennis Alexis Valin Dittrich Feb 4

Generative AI for Analysts https://d.repec.org/n?u=RePEc:arx:papers:2512.19705&r=&r=ain
#AI transforms the information production process: more, faster, balanced, and less useful.
"…forecast errors rise by 59% as AI-assisted reports convey a more balanced mix of positive and negative information that is harder to synthesize
…
As a result of increasing synthesis cost, investors also react less to the signals in the AI-assisted reports. Taken together, these results suggest that AI expands information supply faster than humans can synthesize it, making information synthesis cost the dominant force behind the observed accuracy decline."
#BoundedRationality

Dennis Alexis Valin Dittrich Jan 17

Delegating in the Age of AI: Preferences for Decision Autonomy https://d.repec.org/n?u=RePEc:rco:dpaper:558&r=&r=eur
"… participants systematically underutilize both #AI and human agents, even when those agents outperform them. Despite a general hesitancy to delegate, we observe a clear preference for delegating to AI rather than human agents, a behavioral pattern that remains consistent across both decision domains and architectures
… suggesting that algorithm aversion stems primarily from a broader aversion to relinquishing control rather than from specific distrust towards AI
… If individuals are driven primarily by general reluctance to relinquish control rather than specific distrust in AI, then #transparency alone, focused narrowly on increasing #trust in AI, will likely fall short of overcoming this barrier."
#ExperimentalEcon #BoundedRationality

Dennis Alexis Valin Dittrich Jan 16

One Sentence at a Time: A Quantitative #History of Rationality in Economic Thought https://d.repec.org/n?u=RePEc:osf:socarx:38na2_v1&r=&r=big
"… Combining large language model–based semantic analysis with bibliometric and network methods, we identify and cluster discussions of #rationality across time and scales, such as the circulation of #boundedRationality and the emergence of #behavioralEconomics."
#llm #het #EconomicThought

Dennis Alexis Valin Dittrich Jan 16

Buyer Beware: Star Ratings Actually Steer Us Away From the Best Shopping Deals

When reviewers consider prices while rating products, there’s a tendency to downgrade the highest-quality yet pricier items https://archive.ph/2025.12.21-031310/https://www.wsj.com/business/retail/star-ratings-online-shopping-deals-2fef84ab
#BoundedRationality

Dennis Alexis Valin Dittrich Jan 16

Two #books for the reading list
Decisions, Decisions https://3quarksdaily.com/3quarksdaily/2026/01/decisions-decisions.html
#decisionMaking #BoundedRationality

Decisions, Decisions - 3 Quarks Daily

by Barry Goldman

3 Quarks Daily

Dennis Alexis Valin Dittrich Jan 6

The Modern Peril of the Availability Heuristic https://www.behavioraleconomics.com/the-modern-peril-of-the-availability-heuristic/
"We now live in an era of informational abundance. The problem is no longer insufficient information, but rather too much of it.

.…'UnAvailability Bias’: the tendency to treat the absence of expected information as evidence that a phenomenon does not exist, while failing to consider alternative explanations rooted in institutional, legal, or cognitive constraints.

We still believe that what is more available is more plausible. But humans have added a new rule: what is unavailable is impossible. A reversed availability bias."
#BoundedRationality

The Modern Peril of the Availability Heuristic

The availability heuristic teaches us that easily recalled information feels more probable. But in an era of information abundance, this bias has evolved: what we don't see—when we expect to—becomes evidence of impossibility. This essay introduces 'UnAvailability Bias'—the tendency to treat absent information as proof of nonexistence, ignoring institutional, legal, or cognitive constraints that explain

BehavioralEconomics.com | The BE Hub

Dennis Alexis Valin Dittrich Oct 2

The Great Power Shift: How Intelligent Choice Architectures Rewrite Decision Rights
https://archive.ph/7vnir

The increasing use of AI-powered "intelligent choice architectures" (ICAs) in organizations is transforming how #decisionRights, #power dynamics, and decision-making practices are allocated and structured.

As ICAs become more sophisticated, there are three key shifts occurring: power flows to the human and machine architects of these choice environments, network effects amplify the decision intelligence of ICAs, and the real-time optimization capabilities of ICAs redefine authority and oversight.

To address the risks of the "learning-authority dilemma" where ICAs exceed their granted decision rights, organizations need to establish dynamic governance frameworks that systematically evaluate ICA capabilities and intentionally expand their authority while maintaining oversight.

Leaders must become accountable not just for individual decisions, but for the quality of the ICA systems they create.

The article highlights the need to proactively address decision rights, power structures, and #decisionMaking practices as #AI driven #choiceArchitecture become more prominent in enterprises.

#BoundedRationality #AgenticAI
#AIGovernance #AiEthics #accountability

Dennis Alexis Valin Dittrich Sep 28

Reinterpreting Delay and #Procrastination https://arxiv.org/pdf/2411.11828
"Near the #deadline, the agent feels increasing pressure to spend resources as quickly as possible. Because they have some liquidity, the agent exhibits both correlation aversion and monotonicity with respect to payment timing. Connecting risk and time is sensible, and doing so produces a model of an agent who procrastinates because they misperceive their own utility function or the nature of time passing. These solution properties describe an agent who is very aware of the passage of time and plans accordingly to meet deadline pressure"
#BoundedRationality

Dennis Alexis Valin Dittrich Sep 28

The Subtlety of Optimal Paternalism in a Population with Bounded Rationality https://arxiv.org/pdf/2410.13658
"… optimal utilitarian policy in a heterogeneous population with bounded rationality is highly context specific
…determination of an optimal policy requires the planner to have considerable knowledge of population preferences and behavior. The identification problem is yet more severe when decision makers may be boundedly rational
… utilitarian planners with incomplete knowledge of population preferences and deviations from complete rationality should not seek to optimize policy invoking assumptions that lack credibility
… Planners should recognize their own #boundedRationality, stemming from incompleteness of their knowledge of population preferences and behavior
… pessimistic about the feasibility of credible implementation of optimal #paternalism. Even when heterogeneous agents are completely rational, revealed preference analysis commonly requires unrealistically strong assumptions to point-identify population distributions of utility functions"
#BehavioralEconomics