Neural networks and bounded rationality

Daniel Sgroi and Daniel Zizzo

Physica A: Statistical Mechanics and its Applications, 2007, vol. 375, issue 2, 717-725

Abstract: Traditionally the emphasis in neural network research has been on improving their performance as a means of pattern recognition. Here we take an alternative approach and explore the remarkable similarity between the under-performance of neural networks trained to behave optimally in economic situations and observed human performance in the laboratory under similar circumstances. In particular, we show that neural networks are consistent with observed laboratory play in two very important senses. Firstly, they select a rule for behavior which appears very similar to that used by laboratory subjects. Secondly, using this rule they perform optimally only approximately 60% of the time.

Keywords: Neural networks; Game theory; Bounded rationality; Learning (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:375:y:2007:i:2:p:717-725

DOI: 10.1016/j.physa.2006.10.026

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