Functional Representation of the Intentional Bounded Rationality of Decision-Makers: A Laboratory to Study the Decisions a Priori

Carlos Sáenz-Royo, Francisco Chiclana and Enrique Herrera-Viedma
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Carlos Sáenz-Royo: Department of Organization and Business Management, University of Zaragoza, 50009 Zaragoza, Spain
Francisco Chiclana: Institute of Artificial Intelligence, School of Computer Science and Informatics, De Montfort University, Leicester LE1 9BH, UK
Enrique Herrera-Viedma: Andalusian Research Institute on Data Science and Computational Intelligence (DaSCI), University of Granada, 18071 Granada, Spain

Mathematics, 2022, vol. 10, issue 5, 1-17

Abstract: The judgments of decision-makers are frequently the best way to process the information on complex alternatives. However, the performances of the alternatives are often not observable in their entirety, which prevents researchers from conducting controlled empirical studies. This paper justifies a functional representation that, due to its good predictive results, has been widely used ad hoc in studies in different branches of knowledge; it formalizes aspects of the human mental structure that influence the ability of people to decide and the intentional bounded rationality, and it subsequently analyzes how the reliability of decision-makers is affected by the difficulty of the problem and the expertise and beliefs of the decision-maker. The main research objective of this paper is to derive explicitly a general functional form that represents the behavior of a decision-maker linked to their way of thinking. This functional form allows a laboratory to be created to study a priori the performance of human decisions, i.e., the probability of choosing each of the alternatives, once the returns of the alternatives, the level of expertise, and the initial beliefs of the decision-maker are known exogenously. This laboratory will allow (1) the evaluation of decision support techniques; (2) the creation of agent-based models that anticipate group performances due to individual interactions; and (3) the development of other investigations based on statistical simulations.

Keywords: intended bounded rationality; beliefs; logic; maximum entropy (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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