Search

Studies commonly highlight the informational upside of a board of directors' connections to its external environment. Through their seats on multiple outside boards, directors are positioned to bring valuable informational resources to complex internal tasks on a focal firm. Crafting an ambidextrous strategic orientation is such a task, requiring great informational resourcing from a board to reconcile contradictions of exploration and exploitation. Yet, we assign an important boundary condition to this expectation by unpacking the idea of "busyness" as an important consideration in a board's (in)ability to apply their informational resources. We complement Resource Dependence Theory with insights from bounded rationality and bounded reliability, to challenge the "more is better" assumption of the benefits of outside board seats. We develop corresponding hypotheses on the extent to which busyness of different director types (exemplified here via the busyness of non-executives, executives, and women directors) is related to the ambidextrous strategic orientation of a firm. Our results from a robust longitudinal panel analysis of publicly listed UK firms uncover complex patterns and provide evidence that boards with busy non-executives have a negative influence on the ambidextrous strategic orientation of firms, whereas boards with busy executive directors do not seem to exert an influence. We further find that boards with busy women directors show an inverted U-shaped relation with ambidextrous strategic orientation. We discuss implications for theory and practice. [ABSTRACT FROM AUTHOR]

Analyst forecasts outperform econometric forecasts in the short run but underperform in the long run. We decompose these differences in forecasting accuracy into analysts' information advantage, forecast bias, and forecast noise. We find that noise and bias strongly increase with forecast horizon, while analysts' information advantage decays rapidly. A noise increase with horizon generates a mechanical reversal in the sign of the error-revision (Coibion-Gorodnichenko) regression coefficient at longer horizons, independently of over-/underreaction. A parsimonious model with bounded rationality and a noisy cognitive default matches the term structures of noise and bias jointly. [ABSTRACT FROM AUTHOR]

Recent evidence suggests that agents may base their forecasts for macroeconomic variables mainly on their personal life experiences. We connect this behavior to the concept of constant-gain learning (CGL) in macroeconomics. Our approach incorporates both heterogeneity in the life cycle via the perpetual youth model and learning from experience (LfE) into a linear expectations model where agents are born and die with some probability every period. For LfE, agents employ a decreasing-gain learning (DGL) model using data only from their own lifetimes. While agents are using DGL individually, we show that in the aggregate, expectations follow an approach related to CGL, where the gain is now tied to the probabilities of birth and death. We provide a precise characterization of the relationship between CGL and our model of perpetual youth learning (PYL) and show that PYL can well approximate CGL while pinning down the gain parameter with demographic data. Calibrating the model to U.S. demographics leads to gain parameters similar to those found in the literature. Further, variation in birth and death rates across countries and time periods can help explain the empirical time-variation in gains. Finally, we show that our approach is robust to alternative ways of modeling individual agent learning.

In this study, we examine how organizational rules source knowledge. By knowledge sourcing of a rule, we mean the formation of reference ties from the rule to knowledge sources located outside of the focal rule. Rules can source knowledge from sources within the organization (e.g., other rules) and outside (e.g., research publications, policies, standards, etc.). Our theoretical model proposes that knowledge sourcing of rules is driven by inherent incompleteness of rules as a result of bounded rationality of rule makers and rule making process. Incomplete rules can lead to experiences of insufficient rule knowledge, termed "knowledge gaps," which are shaped by rule dynamics at the levels of individual rules, the rule system, and rule networks. Our theoretical model leads to several hypotheses that we test with longitudinal archival data of clinical practice guideline (CPG) changes in a Canadian healthcare organization. The findings support our theoretical model of incomplete organizational rules which encounter knowledge gaps and close them through internal and external knowledge sourcing. The theoretical and practical implications of the findings are discussed. [ABSTRACT FROM AUTHOR]

Many countries are devoting considerable efforts to replace fossil energy with renewable energy to achieve 'Carbon Neutrality'. Straw-based bioenergy is considered as a potential substitute of fossil energy. This paper investigates the government regulations (i.e. penalty and subsidy policy) for a straw-based bioenergy supply chain consisting of power plants and farmers, in which the three parties are of bounded rationality. We develop a three-party evolutionary game model and obtain the evolutionary stable strategies of the three parties. We establish the dynamic penalty model and show that the dynamic penalty policy can encourage power plants to use bioenergy and farmers to collect bioenergy than the existing static penalty policy. Our results further demonstrate if the proportion of the farmers choosing the 'Collecting bioenergy' strategy is low, the government should choose the 'Penalizing the farmer' strategy; otherwise, the government should choose the 'Penalizing the power plant' strategy. We also extend our model to the government's subsidy policy and compare it with the penalty policy. Specially, when the proportion of the power plants (farmers) using (collecting) bioenergy is high, if the government's subsidies are lower than penalties, the government should choose the subsidy policy; otherwise, the government should choose the penalty policy. [ABSTRACT FROM AUTHOR]

Copyright of Academy of Management Learning & Education is the property of Academy of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: This study constructed an information search process model based on costs and benefits to reflect different information search processes under different decisions from a behavioural economics perspective. Design/methodology/approach: This study used a deductive approach to conceptualise the costs, benefits, and uncertainties of the information search process. Subsequently, we constructed an information search process model based on the costs and benefits using graphical reasoning, loss aversion theory, bounded rationality theory, the satisficing theory of behavioural economics, and the uncertainty changes of information search process. Findings: The model revealed four types of user behaviours in the information search process: (1) avoiding search at the initiation of the search process; (2) exiting in the middle of a search; (3) stopping at the point of satisficing; and (4) continuing the search until experiencing physical discomfort. Originality/value: The model constructed in this study treats the information search as a process based on costs and benefits with uncertainty. This model integrates information search avoidance and stopping into an information search process model. The model identifies users' bounded rationality by evaluating ideal and real situations. Moreover, the model explains relative and absolute information overloads and the area beyond the user's bounded rationality. These findings could help improve users' information literacy and optimise information systems. [ABSTRACT FROM AUTHOR]

Copyright of e-Education Research is the property of Northwest Normal University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Much progress has been made with respect to improving our understanding of organizational learning. However, important gaps remain with respect to understanding barriers to learning flows that are rooted in bounded rationality and how such barriers can be reduced. We show how manifestations of bounded rationality in the form of framing effects and cognitive biases can act as barriers to learning at the individual, group, and organizational levels. We theorize that organizations can cope with these barriers to learning by deploying managerial practices that function as organizational repairs. More specifically, we add 3Is to the 4I framework by showing how intervening, inducing, and inquiring practices can attenuate these cognitive barriers to organizational learning. The three kinds of organizational repairs differ in terms of how directly they engage with the learning behaviors of organizational members. They range from direct managerial interventions (intervening) to incentivizing or nudging organizational members to engage in learning behaviors (inducing) to building a culture of reflexivity (inquiring). Throughout the paper we critically reflect on the explicit and implicit assumptions in the 4I framework as well as our extension of it. [ABSTRACT FROM AUTHOR]

Recent scholarship has sought to develop a "scientific method" for startups. In this paper we contrast two approaches: lean startup and the theory-based view of startups. The lean startup movement has served an important function in calling for a normative and scientific approach to startups and venture creation. The theory-based view shares this agenda. But there are differences in the underlying theoretical mechanisms and practical prescriptions suggested by each approach. We highlight these differences and their implications for both research and practice. For example, we contrast lean startup's emphasis on bounded rationality and entrepreneur–customer information asymmetry with the theory-based view's emphasis on generative rationality and belief asymmetry. The theory-based view focuses on contrarian beliefs, associated problem formulation, and the development of a startup-specific causal logic for experimentation, resource acquisition, and problem solving. The right mix of entrepreneurial actions is contingent and startup-specific—guided by a startup's unique theory. After pointing out differences between the lean and theory-based view of startups, we discuss opportunities for partial reconciliation, as well as opportunities for empirically comparing perspectives. Overall, we emphasize that a scientific method for startups needs to recognize the importance of contingent, discriminating alignment between entrepreneurial theories and the actions they prescribe (including different types of experimentation and validation, search, and forms of organization). [ABSTRACT FROM AUTHOR]

Since decision-makers in reality are not always able to analyze problems perfectly rationally, a pursuit evasion game algorithm based on bounded rationality is proposed. It establishes a pursuit evasion game model and first solves the saddle point strategies of the two players under perfect rationality. Introducing the bounded rationality level- k model, a structural assumption is made on the level of thinking strategies for pursuers and evaders. It allows both parties to have different strategic reasoning abilities, and gives corresponding levels' value functions and strategies, which satisfy the HJI equation. As the level increases, the strategy will eventually tend towards Nash equilibrium. Due to the difficulty in directly solving the HJI equation, an actor critic algorithm based on reinforcement learning is used to solve it. The algorithm is designed to enable pursuers to estimate the thinking level of evaders and adopt appropriate strategies. Simplify the motion of a ship as a two-dimensional mathematical model, this paper establishes a ship pursuit and evasion game model, and performs algorithm simulation verification on it. [ABSTRACT FROM AUTHOR]

ABSTRACT According to the Theory of the Second Best, in non‐ideal circumstances, approximating ideals might be suboptimal (with respect to a specific interpretation of what “approximating an ideal” means). In this paper, I argue that the formal model underlying the Theory can apply to problems in epistemology. Two applications are discussed: First, in some circumstances, second‐best problems arise in Bayesian settings. Second, the division of epistemic labor can be subject to second‐best problems. These results matter. They allow us to evaluate the claim, made by many philosophers, that second‐best problems have import in epistemology (and the specific conditions under which the Theory finds applications). They also allow us to see that talk of “approximating an ideal” is ambiguous, and to clarify the conditions in which approximating an epistemic ideal might be beneficial. [ABSTRACT FROM AUTHOR]

We mainly study the existence, structural stability and robustness of fuzzy slightly altruistic equilibria for a class of generalized multiobjective fuzzy games which are expressed as ϖ . Firstly, we introduce the concept of fuzzy slightly altruistic equilibrium and prove the existence of equilibrium for the ϖ by Fan–Glicksberg fixed point theorem. Secondly, the connections between ϖ and bounded rationality are discussed by an abstract rationality functions. Moreover, we construct the problem space of ϖ which is represented by Λ and show that most ϖ ∈ Λ are structurally stable and robust to ε -equilibrium on the meaning of Baire category. These results are new and extend some existing results in recent literature. [ABSTRACT FROM AUTHOR]

Sexual violence is explained using a social psychological theory of aggression that emphasizes bounded rationality. The approach challenges feminist approaches that examine violence against women in isolation and attribute it to sexism. It suggests that sex differences in sexuality lead men to attempt to influence women to have sex using various means. Sex differences in physical strength create opportunities for them to use violence while chivalry encourages them to act like "gentlemen." Research on the age of victims, sexual arousal, self-reported motives, legalized prostitution, and modus operandi support the commonsense notion that most incidents are sexually motivated. As a result of sexual motivation, rape is as much a crime against teenagers as it is a crime against women. However, evidence suggests that some rapes–like other violent crimes– are motivated by real or imagined grievances. The role of grievances is supported by research on self-reported motives and justifications, and the offender's use of gratuitous violence during the incident. It is argued that sexual assault can be explained by bounded rationality and well-established social psychological processes. [ABSTRACT FROM AUTHOR]

Featured Application: This article mainly utilizes the advantages and characteristics of evolutionary game theory and based on the ideas and methods of evolutionary game theory, investigates the spontaneous formation of the relationships among the local governments, power grid enterprises, and market regulators based on low-carbon trading mechanisms during long-term carbon emission reduction. This tripartite evolution game is described as a learning progressive evolution system, focusing on the evolution process of the relationship between various stakeholders and the influencing factors of evolutionary stability in the electricity market and carbon emission market. It provides a reasonable explanation for the spontaneous formation of interest equilibrium states within the local government, power grid enterprises, and market regulators, and also provides theoretical reference and policy suggestions for government regulation to the electricity market and carbon emission market. In the context of increasing global efforts to mitigate climate change, effective carbon emission reduction is a pressing issue. Governments and power companies are key stakeholders in implementing low-carbon strategies, but their interactions require careful management to ensure optimal outcomes for both economic development and environmental protection. This paper addresses this real-world challenge by utilizing evolutionary game theory (EGT) to model the strategic interactions between these stakeholders under a low-carbon trading mechanism. Unlike classical game theory, which assumes complete rationality and perfect information, EGT allows for bounded rationality and learning over time, making it particularly suitable for modeling long-term interactions in complex systems like carbon markets. This study builds an evolutionary game model between the government and power companies to explore how different strategies in carbon emission reduction evolve over time. Using payoff matrices and replicator dynamics equations, we determine the evolutionarily stable equilibrium (ESE) points and analyze their stability through dynamic simulations. The findings show that in the absence of a third-party regulator, neither party achieves an ideal ESE. To address this, a third-party regulatory body is introduced into the model, leading to the formulation of a tripartite evolutionary game. The results highlight the importance of regulatory oversight in achieving stable and optimal low-carbon strategies. This paper offers practical policy recommendations based on the simulation outcomes, providing a robust theoretical framework for government intervention in carbon markets and guiding enterprises towards sustainable practices. [ABSTRACT FROM AUTHOR]

In queueing systems where queues are invisible, it is critical for companies to make decisions about the timing of announcing the anticipated delay to customers. In this paper, a simulation model is built to simulate an invisible queueing system, and several queueing scenarios are considered, including different system congestion and different company goals, to explore the impact of different announcement timings. In the modeling of customer behavior, we argue that it is difficult for companies to announce perfectly accurate delay and rarely have customers fully trust the announcement, so the quantal-response model is included to model customers' probabilistic choice behavior due to the bounded rationality. Meanwhile, we consider customer heterogeneity, assign customers different initial patience and, as an extension, also assume that patience will be updated. We perform simulation experiments and analyze the experimental data to dissect the underlying reasons, and then give sound management suggestions. The experiments show that the optimal announcement timing is different for different scenarios, which shows that in practical decisions, companies should adopt different announcement strategies for different scenarios. What's more, in some scenarios, delayed announcement at specific time is better than on-arrival announcement, which suggests that when we judge the value of announcement, we should add the definite word of specific timing to the announcement. The breakthrough point of this paper is to consider customers' bounded rationality and the dynamic patience; meanwhile, it fills the gap of announcement timing research and explores the value of additional announcements after the initial announcement. [ABSTRACT FROM AUTHOR]

As one of the most fundamental concepts in transportation science, Wardrop equilibrium (WE) has always had a relatively weak behavioral underpinning. To strengthen this foundation, one must reckon with bounded rationality in human decision-making processes, such as the lack of accurate information, limited computing power, and suboptimal choices. This retreat from behavioral perfectionism in the literature, however, was typically accompanied by a conceptual modification of WE. Here, we show that giving up perfect rationality need not force a departure from WE. On the contrary, WE can be reached with global stability in a routing game played by boundedly rational travelers. We achieve this result by developing a day-to-day (DTD) dynamical model that mimics how travelers gradually adjust their route valuations, hence choice probabilities, based on past experiences. Our model, called cumulative logit (CumLog), resembles the classical DTD models but makes a crucial change; whereas the classical models assume that routes are valued based on the cost averaged over historical data, our model values the routes based on the cost accumulated. To describe route choice behaviors, the CumLog model only uses two parameters, one accounting for the rate at which the future route cost is discounted in the valuation relative to the past ones and the other describing the sensitivity of route choice probabilities to valuation differences. We prove that the CumLog model always converges to WE, regardless of the initial point, as long as the behavioral parameters satisfy certain mild conditions. Our theory thus upholds WE's role as a benchmark in transportation systems analysis. It also explains why equally good routes at equilibrium may be selected with different probabilities, which solves the instability problem posed by Harsanyi. Funding: This research is funded by the National Science Foundation [Grants CMMI #2225087 and ECCS #2048075]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/trsc.2023.0132. [ABSTRACT FROM AUTHOR]

The global labor market has experienced significant transformations due to technological advancements, globalization, and evolving socio-economic dynamics. Despite predictions from neoclassical economics, anomalies such as wage rigidity, involuntary unemployment, and underemployment persist. This article aims to critically analyze the neoclassical model's assumptions of rationality, perfect information, and utility maximization, contrasting them with insights from behavioral economics. A review of studies addressing labor market issues from a behavioral economics perspective was conducted using key terms such as "behavioral economics," "labor supply," and "neoclassical economics." The results indicate that behavioral factors, including bounded rationality, cognitive biases such as risk aversion, and social preferences, significantly influence labor supply decisions. These factors provide a more realistic interpretation of economic behavior, addressing anomalies that neoclassical theories fail to explain. In conclusion, behavioral economics offers a robust framework for understanding labor market dynamics, particularly in wage dynamics, where cognitive biases impact decision-making. This approach challenges traditional economic models and underscores the importance of incorporating psychological factors into labor market policies. [ABSTRACT FROM AUTHOR]

In this paper, I introduce two novel treatments into learning-to-forecast experiments: an initial anchor and a limited information treatment. The initial anchor pins down the subjects' initial expectations and makes cross-session results more comparable. In the limited information treatment, subjects can only observe the most recent market outcome. Surprisingly, price dynamics do not differ between full and limited information sessions. This suggests that when making decisions, subjects disregard most information and rely primarily on a few recent observations. Furthermore, regardless of the market's feedback system, positive or negative, subjects predominantly use a single heuristic to form expectations. • Two new treatments are introduced into learning-to-forecast experiments. • An initial anchor can successfully pin down subjects' initial expectations. • In the limited-info treatment, subjects can only observe the most recent outcome. • Surprisingly, having more information does not improve subjects' predictions. • Subjects use one heuristic to make predictions, regardless of the feedback system. [ABSTRACT FROM AUTHOR]

The aim of this study is to dissect and enhance the tripartite collaborative governance mechanisms among polluting enterprises, the public, and government regulatory bodies within the scope of China's recent healthcare reforms. Through the lens of an evolutionary game model, this research seeks to understand the strategic evolutionary equilibrium among these actors and evaluate the impact of various incentives and penalties on their decision-making processes. Utilizing an evolutionary game model from a bounded rationality perspective, it investigates the strategic evolutionary equilibrium among the stakeholders and the influence of various factors on their strategic evolution. A critical equilibrium point E5(1,1,0) was identified, where enterprises adopt clean production strategies, the public engages in environmental governance, and the government exercises lenient regulatory strategies. Empirical analysis employing real-world data further substantiates the theoretical findings, showcasing how governmental bodies can drive clean production measures among polluting enterprises through economic incentives or penalties. The study outlines pivotal measures for achieving collaborative ecological governance in the Pearl River Delta region, such as establishing an information sharing platform, augmenting government regulation and enforcement, encouraging clean production in enterprises, enhancing public participation, and bolstering support for technological innovation. These measures could promote continuous environmental amelioration and sustainable development in the region. The findings offer both theoretical and practical insights for multifaceted environmental governance in China, illuminating the nuanced interplay among governmental bodies, industries, and the public in enhancing environmental standards and healthcare reforms. [ABSTRACT FROM AUTHOR]

I argue that bounded agents face a systematic accuracy–coherence trade-off in cognition. Agents must choose whether to structure their cognition in ways likely to promote coherence or accuracy. I illustrate the accuracy–coherence trade-off by showing how it arises out of at least two component trade-offs: a coherence–complexity trade-off between coherence and cognitive complexity, and a coherence–variety trade-off between coherence and strategic variety. These trade-offs give rise to an accuracy–coherence trade-off because privileging coherence over complexity or strategic variety often leads to a corresponding reduction in accuracy. I conclude with a discussion of two normative consequences for the study of bounded rationality: the importance of procedural rationality and the role of coherence in theories of bounded rationality. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Management & Economics Research is the property of Journal of Management & Economics Research and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Prior research emphasizes how organizational culture can hinder organizational adaptation. In this study, we investigate how organizational culture can help promote organizational adaptation to environmental changes, using a formal model from cultural evolution theory. In the model, organizational members face a trade-off between innovating versus following tradition (because environmental changes are uncertain). Members can also decide to help others who are following the tradition, thereby improving its diffusion. Organizational leaders shape the culture of their organization, which influences members' decisions to choose innovation or tradition or to help others following tradition. Culture comprises two dimensions: beliefs and prosocial values. We find that increasing the accuracy of beliefs leads to improvements in both innovation and following tradition, thereby mitigating the trade-off between them and boosting adaptation and performance. On prosocial values, we find that increasing their intensity reduces the cost of following tradition but at the expense of reduced adaptation, resulting in an inverted-U relationship between intensity of prosocial values and performance. Overall, we show how leaders can fine-tune the dimensions of organizational culture to foster improvements in adaptation and performance. The formal model we introduce is novel to the literature and offers a way of studying adaptation to a changing environment and to incorporate social learning into models of adaptation under bounded rationality. Funding: J. Poblete was supported by Instituto Sistemas Complejos de Ingenieria [Grant ANID PIA/PUENTE AFB230002]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.16791. [ABSTRACT FROM AUTHOR]

A vibrant literature incorporates elements of bounded rationality into choice theory. We survey this work, discussing five central ways in which the literature has modeled departures from the rational choice procedure. We discuss the variety of purposes axiomatic choice characterizations serve for these positive theories, delve into experimental tests, synthesize the welfare debate, and assess important future directions. (JEL D11, D44, D60, D83, D91) [ABSTRACT FROM AUTHOR]

Communities face the challenge of finding restoration strategies in the aftermath of disasters. In particular, independent and self‐interested utility managers devise such strategies for infrastructure through a heuristic decentralized process. This paper takes a game‐theoretic approach to model the decentralized and strategic restoration decision making with application to interdependent infrastructure. Particularly, we model the decision process using simultaneous games to investigate decision makers' conflicting preferences. We employ Bayesian games to incorporate the realistic assumptions of poor interagent communication, resulting in incomplete information. Also, we account for behavioral biases such as bounded rationality, cooperative behavior or lack thereof, and equality‐driven resource allocations. We test our models using ideal, synthetic interdependent networks, and the realistic infrastructure of Shelby County, TN. Results show that cooperation leads to the best‐performing decisions even if others are not cooperative. The necessity of cooperation is even higher when there is a dominant player whose service is vital to other players. Our sensitivity results highlight the significant influence of resource availability and allocation on the performance of restoration plans. Our approach enhances the practicality of decision models for community resilience, and unravels novel policy strategies such as cooperation incentives. [ABSTRACT FROM AUTHOR]

This paper investigates the incidence of limited attention in a high-stakes business setting: a bar owner may be unable to purge transitory shocks from noisy profit signals when deciding whether to exit. Combining a 24-year monthly panel on the alcohol revenues from every bar in Texas with weather data, we find suggestive evidence that inexperienced, distantly located owners may overreact to the transitory component of revenue relative to the persistent component. This apparent asymmetric response is muted under higher revenue fluctuations. We formulate and estimate a structural model to endogenize attention allocation by owners with different thinking cost. Under the assumptions of the model, we find that 3.9% bars make incorrect exit decisions due to limited attention. As exits are irreversible, permanent decisions, small mistakes at the margin interpreting profit signals can lead to large welfare losses for entrepreneurs. [ABSTRACT FROM AUTHOR]

It is well known that laboratory subjects often do not play mixed strategy equilibria games according to the theoretical predictions. However, little is known about the role of cognition in these strategic settings. We therefore conduct an experiment where subjects play a repeated hide and seek game against a computer opponent. Subjects play with either fewer available cognitive resources (high cognitive load treatment) or with more available cognitive resources (low cognitive load treatment). Surprisingly, we find some evidence that subjects in the high load treatment earn more than subjects in the low treatment. However, we also find that subjects in the low treatment exhibit a greater rate of increase in earnings across rounds, thus suggesting more learning. Our evidence is consistent with subjects in the low load treatment over-experimenting. Further, while we observe that subjects do not mix in the predicted proportions and that their actions exhibit serial correlation, we do not find strong evidence these are related to their available cognitive resources. This suggests that the standard laboratory deviations from the theoretical predictions are not associated with the availability of cognitive resources. Our results shed light on the extent to which cognitive resources affect (and do not affect) behavior in games with mixed strategy equilibria. [ABSTRACT FROM AUTHOR]

Abstract According to management by objectives (MBO) theory, the significance of management objectives must be considered as a reference point in a performance evaluation. Cross efficiency evaluation has always been considered to be one of the important performance evaluation methods. However, few studies to date have considered the impact of management objectives on cross efficiency. According to prospect theory, the choice of reference point will cause irrational psychology in decision makers. A management objective is a natural reference point, which will cause a ‘gain and loss’ psychology in enterprises and may create irrational psychology. Performance level is an important index by which to evaluate resource allocation, which in turn can be regarded as an important enterprise management objective. This paper proposes a cross efficiency evaluation method based on performance level. Cross efficiency evaluation models are constructed, based on the irrational psychology that occurs under organization objectives, personal objectives and composite objectives. This method not only considers the bounded rational behavior of enterprises, but is also more flexible. A numerical example is given to illustrate the application of the bounded rational cross efficiency evaluation method in data envelopment analysis (DEA) ranking.

Within the intricate dynamics of a blockchain system, participants with bounded rationality may engage in dishonest behavior, thereby disrupting the consensus of the system in the absence of incentive mechanisms. This vulnerability is particularly common in voting-based consensus mechanisms like Practical Byzantine Fault Tolerance (PBFT), yet existing analyses often overlook the rational perspectives of participants. In this paper, we introduce an evolutionary game-theoretic approach to extend the current incentive mechanisms, enhancing the system's stability and security. In permissioned blockchain environments, we developed a three-party evolutionary game model involving proposers, validators and auditors that dynamically assesses node strategies under various economic incentives and attack scenarios on an improved mechanism basis. Using replicator dynamic equations, we identified the conditions under which nodes converge to different evolutionarily stable strategies. Through simulation experiments, we validated the incentive mechanism's effectiveness in promoting honest participation and resisting bribery attacks. When dishonest nodes do not exceed 80%, the system can quickly evolve to the honest state and can cope with changes in the payoff for malfeasance, whereas the original mechanism could not reach the ideal state under any condition. This achievement is attributed to the design of the mechanism and the judicious adjustment of reward and punishment parameters. The research contributes valuable findings to the discourse on consensus security. It provides key insights for developing more robust and rational incentive mechanisms in future protocols. [ABSTRACT FROM AUTHOR]

We propose a novel framework that revisits the seminal Chamley-Judd zero capital taxation result in light of bounded rationality stemming from a finite policy planning horizon and structural frictions in fiscal institutions. We show a mechanism that generates positive optimal capital taxation in the long run. Our numerical results indicate that the current tax system in the United States could be near-optimal in a constrained environment where policymakers exhibit limited policy planning horizons and imperfect altruism toward household welfare under subsequent governments. [ABSTRACT FROM AUTHOR]

Psychological observations are by now well integrated into economics, especially in the theory of finance, as can also be seen in the Nobel Prize awarded to Thaler. On the contrary, Simon's attempt to reforge economic theory on the paradigm of bounded rationality failed. Starting from the birth of the neoclassical paradigm, we'll describe the attempt to give it psychological foundations with a direct measurement of utility, then the axiomatic turn of the paradigm and its first anomalies. We'll then sum up the debate on rationality, taking place in the group of economists led by Simon, which brought to the rational expectations hypothesis. Finally, we'll discuss the development of behavioral economics and its progressive acceptance in economic theory. This historical reconstruction allows us to understand the actual hard core of the neoclassical paradigm and the growing need of the paradigm for practical flexibility that determines how to choose arguments, methods and evidence that can be useful to its development, including psychological ones. [ABSTRACT FROM AUTHOR]

Bilevel optimization problems embed the optimality of a subproblem as a constraint of another optimization problem. We introduce the concept of near-optimality robustness for bilevel optimization, protecting the upper-level solution feasibility from limited deviations from the optimal solution at the lower level. General properties and necessary conditions for the existence of solutions are derived for near-optimal robust versions of general bilevel optimization problems. A duality-based solution method is defined when the lower level is convex, leveraging the methodology from the robust and bilevel literature. Numerical results assess the efficiency of exact and heuristic methods and the impact of valid inequalities on the solution time. [ABSTRACT FROM AUTHOR]

Rationality in economics, corroborated with the idea that human action, essentially economic life, cannot be consumed far from rationality, as it has been analyzed by all economic thinkers, is neither inscribed in the sphere of purity nor is it whole. The evolution of economic science has allowed both positive and counter-ideas of rationality, what is worth emphasizing is the fact that the imperfection of economic rationality has been admitted even by its fiercest defenders. The resources attracted and used, viewed in absolute terms, have increased and diversified continuously, on the other hand, relative to the growth and diversification of needs, resources have been and remain limited. In this sense, people's permanent preoccupation with choosing resources and ranking their use to better satisfy needs is the fundamental problem of organizing any economy. Through this paper, it is proposed to analyze through a bibliographic study, comparing the qualitative causal link between the forms of rationality used in economic science. Rationality in economics arose as a result of the limitation of resources, this concept is practically the essence of economic science.

Objective: to define the content of concepts that formalize the problem area of the modern social and labor relations (SLR) and to offer a solution to the problem of SLR regulation from the viewpoint of rationalization factor.Methods: content analysis and systematization of scientific publications, including logical, comparative and contextual analysis; methods of dialectical cognition, system analysis and synthesis, SWOT-analysis, and modeling; structural and system-functional approach.Results: based on the analysis of foreign and Russian publications on various aspects of the SLR definition and development, the author formulated the content of concepts reflecting the said phenomenon in the logic of changes, problems and solutions. The problem area of the modern SLR interpretation was outlined, within which the rationalization potential of the labor subjects activity is not differentiated, which makes it difficult both to formalize certain modern problem aspects and to formulate relevant corrective proposals. A solution was developed that takes into account the resource of economic thinking of individuals with bounded rationality; this allows supplementing the essential construction of the rationalization concept in the context of labor activity. Using the established theoretical and methodological toolkit, the author reveals the possibilities to improve the labor agents’ adaptability under the changes in SLR and to promote the constructive interaction of SLR subjects in general. The article shows potential directions of scientific search concerning the activity of labor actors as subjects of rationalization under the changes.Scientific novelty: the article develops the concept of labor rationalization as a function of systemic economic thinking, which allows compensating for limited rationality and thus increasing constructive interaction of SLR subjects.Practical significance: the provisions developed in the article can be used in research work when considering the issues of SLR and labor rationalization and in educational activities from the viewpoint of the established competence model.

The stable and efficient operation of rail transit networks (RTNs) is critical for the integrated development of metropolitan areas. However, numerous studies have indicated that RTNs are prone to large‐scale cascading failures when subjected to disturbances. To address the limitations of traditional cascading failure models, this paper proposes an innovative cascading failure model for metropolitan areas RTNs, which incorporates nonlinear load fluctuations and the bounded rationality of passengers. This model aims to capture the cascading failure characteristics of RTNs with chaotic properties under 12 combination strategies. A single‐ and dual‐parameter coupling analysis of chaotic evolution parameters and prospect theory parameters are conducted. Taking the RTN in the Chengdu metropolitan area as an example, both the static characteristics and cascading failure features of the network are analyzed. The findings reveal the following: (i) the RTN is a assortativity network and lacks small‐world and scale‐free properties. (ii) During network disturbances, a higher level of passenger familiarity with the network increases the likelihood of large‐scale cascading failures. (iii) When passengers tend to avoid risks, stations with higher carrying capacity are more prone to failures. This study holds significant implications for ensuring the stable and reliable operation of rail transit systems within metropolitan areas. [ABSTRACT FROM AUTHOR]

Models of heuristics are often predicated on the desideratum that they should possess no free parameters. As a result, heuristic implementations are usually deterministic and do not allow for any choice errors, as the latter would require a parameter to regulate the magnitude of errors. We discuss the implications of this in light of research that highlights the evidence supporting stochastic choice and its dependence on preferential strength. We argue that, in principle, the existing models of deterministic heuristics should, and can, be quite easily modified to stochastic counterparts through the addition of an errormechanism. This requires a single free parameter in the error mechanism, whilst otherwise retaining the parameter-free cognitive processes in the deterministic component of existing heuristics. We present various types of error mechanisms applicable to heuristics and discuss their comparative virtues and drawbacks, paying particular attention to their impact on model comparisons between heuristics and parameter-rich models. [ABSTRACT FROM AUTHOR]

Amid rising global demand for renewable energy, geothermal power emerges as a vital, low-carbon solution to enhance energy security and sustainability. Taiwan, strategically located on the seismically active Pacific Ring of Fire, possesses an untapped geothermal potential that is underutilized due to complex site selection challenges. This study specifically addresses the need for a more precise and psychologically attuned site selection process, aiming to optimize the development of geothermal resources in regions with complex geological settings. Utilizing the Modified Bounded Rationality Data Envelopment Analysis (MB-DEA) model, this research integrates traditional DEA with bounded rationality to factor in the risk preferences of decision-makers, offering a novel approach that enhances accuracy in evaluating geothermal sites. This study addresses the critical challenge of accurately selecting geothermal energy sites in geologically complex regions like Taiwan, where traditional methods fall short, aiming to significantly boost the efficiency and effectiveness of geothermal energy exploitation as part of Taiwan's transition to renewable energy sources. Applied to 30 potential sites across Taiwan, our model provides a detailed assessment based on technical, economic, and psychological criteria, revealing variations in site suitability influenced by stakeholder risk attitudes. Key locations such as Datun Mountain, Maoxing, and Taolin consistently rank highly, confirming their robust potential irrespective of risk preferences. At the same time, other sites show marked sensitivity to shifts in decision-making attitudes. This work significantly advances the methodology of renewable energy site selection by demonstrating the utility of incorporating psychological factors into analytical models, which not only refines decision-making processes but also aligns with Taiwan's strategic energy planning goals. This study also underscores the importance of accurate geographical data in complex terrains, suggesting further refinement and dynamic integration of bounded rationality for future research. [ABSTRACT FROM AUTHOR]

In this work, a dynamic quantum Cournot duopoly game with two different objectives is proposed by applying the Li-Du-Massar quantization scheme. In this game, the first player is a (semi-) public firm adopting bounded rationality and aims to maximize the weighted sum of its own profit and social welfare, while the second player focus on the objective to maximize its own profit as a private firm with naïve expectation. The local stability conditions for the quantum Nash equilibrium of the system are analyzed. Numerical simulations are presented to display the dynamic behaviors including stability region, bifurcation and chaos diagrams, and sensitive dependence on initial conditions. The results of theoretical and numerical analysis show that a larger weight on profit or adjustment speed parameter can enhance the stability of the quantum Cournot duopoly system. Differently, a higher entanglement level will hasten the local instability of the quantum Nash equilibrium point. It is also shown that a larger quantum entanglement weakens the sensitivity to initial conditions. Moreover, the equilibrium of the system can loose stability via flip bifurcation while varying the value of the adjustment speed, and time-delayed feedback control method can be applied to stabilize the chaotic behaviors. [ABSTRACT FROM AUTHOR]

The paper aims to enhance wireless networks by improving cost and fairness with the assistance of reconfigurable intelligent surfaces (RISs) and game theory. Trusted RIS holders could purchase the copyrights of RIS technology from wireless service providers, their competitive behaviors were simulated using a non-cooperative pricing game to optimize the utility of the pricing structure. RIS holders were supposed to be bounded rational and base their decisions on past strategies. This selfish action was framed as a duopoly game of bounded rationality with history. To ensure fairness, the solution to this game was defined as the Nash equilibrium, but maintaining the stability of this solution was difficult. The local stability of the solution was analyzed. Numerical simulations showed that RIS holders who possessed story-awareness were more likely to attain Nash equilibrium, and its stability region became larger for specific story weights and RIS size values. Next, a basin of attraction graph simulated the effect of history on the global stability of Nash equilibrium. The study provided information to RIS holders to minimize the cost of installing RIS on their own or rented properties while transmitting more radio spectrum to users. [ABSTRACT FROM AUTHOR]

This research takes the construction companies and supervision units of megaprojects as the research objects and studies safety issues in construction decision-making for megaprojects. Using evolutionary game theory, we construct an evolutionary game model of safety decision-making behavior for construction companies and supervision units based on the bounded rationality assumption. The interaction and dynamic patterns of safety behaviors between the two construction entities are analyzed. Additionally, system dynamics Vensim PLE 10.2.1 software is employed to simulate and analyze the behavior of single entities as well as the impact of exogenous variables on the safety decision-making choices of both units. The research results indicate that positive choices in safety behavior decision-making contribute to enhancing the stability of megaproject construction. Exogenous variables significantly influence the safety behavior decisions of both the construction companies and the supervision units in megaprojects. An increase in cooperation benefits between the two parties fosters their active collaboration in completing mega engineering projects. This research promotes cooperation between construction companies and supervision units during a construction process and provides a reference for the safe and orderly implementation and development of megaprojects. [ABSTRACT FROM AUTHOR]

Supply chain decision making can cause exaggerated fluctuations in inventory levels in spite of small changes in customer demand. While previous research has recognized the positive impact of information sharing on supply chain decision making, little attention has been given to how information is presented, such as through dashboards or information displays. This study applies bounded rationality theory, intrinsic motivation, and the knowledge-based view to address this gap, exploring the effects of providing information to supply chain managers, emphasizing how the information is presented rather than merely its availability. Via an experiment using a version of the beer game supply chain simulation, we find that the display of information about inventory and upstream incoming orders significantly impacted overall performance. Psychometric modeling indicates that knowledge acquisition and shared meaning are crucial in decision-makers' perceived performance. Moreover, information distribution among supply chain participants will likely contribute to cognitive overload and reduce motivation to improve decision-making. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to analyze the interactions within the intellectual property pledge financing framework involving SMBMEs, banks, and third-party intermediaries, focusing on factors that promote sustainable cooperation. Methods: The research employs an evolutionary game model to simulate and analyze strategic interactions among the stakeholders, considering bounded rationality and asymmetric information. Results: Key findings include the positive correlation between SMBMEs' reputation and timely repayment, the adverse effects of patent devaluation on cooperation, and the reasonable loan interest rates for facilitating GPPFG cooperation. The study also highlights the need for a transparent information platform and reasonable breach of contract compensation. Conclusions: The paper concludes that an efficient GPPFG mechanism is crucial for SMBMEs' financial support and green transformation. It suggests that third-party intermediaries play a significant role in risk reduction and innovation facilitation. The study acknowledges limitations and calls for future research to explore technological innovations and improve intermediary service systems for SMBMEs' sustainable development. [ABSTRACT FROM AUTHOR]

The engineering general contracting mode is an advanced engineering transaction mode, and design optimization is one of the important driving forces for vigorously promoting the general contracting mode. The application proportion of the general contracting mode in infrastructure projects is not high, the number of successful projects is not large, and the implementation effect is not ideal. One of the main reasons is that the design optimization theory and practice of international standard general contracting projects cannot adapt to the general contracting projects in the Chinese context, making local general contracting projects face huge challenges such as low enthusiasm for design optimization from all parties and unsatisfactory design optimization effects. Therefore, under the premise of bounded rationality, when the owner adopts control methods of different intensities, an evolutionary game study on the selection of design optimization strategies between the design and construction parties is carried out, and stability control strategies are proposed through case experiments and simulations. The research results indicate the following: firstly, the design optimization of general contracting projects in the Chinese context is feasible, but it depends on the distribution ratio of benefits obtained from the design optimization. Compared with general civil construction general contracting projects, the design optimization allocation ratio of industrial construction general contracting projects is more significant; secondly, the mixed control method of strong control and weak control is the optimal choice for the owner of the general contracting project; and thirdly, there are multiple evolutionary stable points, and mechanism design or incentive measures should be used to guide owners to choose weak control strategies, while design and construction parties should choose their design optimization strategies. The research results provide a reference for owners to determine the proportion and scheme of design optimization allocation, and for construction parties to determine design optimization strategies. [ABSTRACT FROM AUTHOR]

Inspired by the idea of game learning, this paper studies the Cournot game model of the multi-oligopoly market and studies the realization of the Nash equilibrium by using adaptive differential evolution algorithm based on relaxation strategies. The realization path of Nash equilibrium is attained through an adaptive differential evolution based on a relaxation strategy procedure applied to an objective function with best response dynamics. Among them, the objective function is derived from the sum of the payoff changes of each oligopoly under best response decisions. And theoretically proved that the Nash equilibrium is the optimal solution of the objective function. [ABSTRACT FROM AUTHOR]

In multi-criteria group decision-making (MCGDM) problems with incomplete fuzzy preference relations (FPRs), the consistency based on bounded rationality is preferred to depend on the historical preferences of decision makers to generate complete FPR matrices. There are two factors in influencing the effect of historical preferences on complete FPR matrices and further decision makers' satisfaction of group solutions. One is the effectiveness of historical preferences and the other is their relative weights. On this basis, this paper proposes a new MCGDM method with FPRs based on the filtration-and-weighting-based triangular bounded consistency (FWBTBC), where historical FPRs between three adjacent pairs of alternatives are characterized by triangles and these two factors are considered comprehensively. A triangle filtration process is designed based on the Grubbs criterion to filter the abnormal triangles in the collected ones. A weight determination process is developed, where a distance measure between remaining triangles is constructed to calculate their weights. Based on the combination of the two processes, the FWBTBC of FPRs is created and then the proposed method is presented. The validity of the proposed method is demonstrated by its application in analyzing a drainage tube supplier selection problem for a tertiary hospital located in Hefei, Anhui, China. [ABSTRACT FROM AUTHOR]

Our study analyzes data from the Corporate Prosecution Registry of the University of Virginia School of Law and Duke University School of Law (Garrett and Ashley, 2023). We examine a subset of corporate violators, namely prosecutions brought under the Sherman Antitrust Act's criminal provisions. The Sherman Antitrust Act of 1890 is a federal statute that prohibits activities that restrict interstate commerce and competition in the marketplace. We utilize the framework of bounded rationality of decision making to hypothesize that prosecutors are influenced by internal and external factors that affect the total monetary penalties ultimately levied on corporate violators of the Sherman Anti-Trust Law's criminal provisions. Specifically, our results indicate that corporate monetary penalties for antitrust corporate offenders are significantly more likely to be lower when the corporate defendant entered into disposition agreements (such as non-prosecution agreements, deferred prosecution agreements, and plea agreements) with the prosecutor and is a company incorporated and registered under U.S. laws. On the other hand, the total monetary penalties imposed on corporate defendants are more likely to be higher when the defendant is a financial institution, a public company, or a Fortune 500 company. [ABSTRACT FROM AUTHOR]