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In standard models of rational learning from experience, prior uncertainties and disagreements recede smoothly as common evidence accumulates. However, this presumes that the underlying risks are relatively stable. Otherwise, rational learners need to sift random noise for signs that the trend...
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Recent studies suggest that the type of strategic environment or expectation feedback may have a large impact on whether the market learns the rational fundamental price. We present an experiment where the fundamental price experiences large unexpected shocks. Markets with negative expectation...
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advantageous and disadvantageous in our understanding of entrepreneurship and where it fits into cognition and rationality. We … rationality structures that relate to these cornerstones in order to establish what constitutes entrepreneurial cognition. We use … these areas to add two new rationality types to Simon's administrative and Spender's creative/design person to build four …
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In this paper we question the hypothesis of full rationality in the context of job changing behaviour, via simple … forces of job change are future real wages and expected job quality. Bounded rationality suggests that individuals will … and between cells. Under full rationality the following are to be expected: high inter-cell mobility, large dispersion …
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The weak rationality principle is not an empirical statement but a heuristic rule of how to proceed in social sciences …-foundation and, therefore, employ the rationality assumption in economic models. Then, with reference to the "bounded rationality … a part of the rationality assumption. We conclude with some remarks on handling the problems of "free will" as well as …
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This paper analyses the welfare effects of price restrictions on private contracting in a world where agents have a limited cognitive ability. People compute the costs and benefits of entering a transaction with an error. The government knows the distribution of true costs and benefits as well...
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