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Dynamic Inconsistency
In economics, dynamic inconsistency or time inconsistency is a situation in which a decision-maker's preferences change over time in such a way that a preference can become inconsistent at another point in time. This can be thought of as there being many different "selves" within decision makers, with each "self" representing the decision-maker at a different point in time; the inconsistency occurs when not all preferences are aligned. The term "dynamic inconsistency" is more closely affiliated with game theory, whereas "time inconsistency" is more closely affiliated with behavioral economics. In game theory In the context of game theory, dynamic inconsistency is a situation in a dynamic game where a player's best plan for some future period will not be optimal when that future period arrives. A dynamically inconsistent game is subgame imperfect. In this context, the inconsistency is primarily about commitment and credible threats. This manifests itself through a violation ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Self Control
Self-control is an aspect of inhibitory control, one of the core executive functions. Executive functions are cognitive processes that are necessary for regulating one's behavior in order to achieve specific goals. Defined more independently, self-control is the ability to regulate one's emotions, thoughts, and behavior in the face of temptations and impulses. Thought to be like a muscle, acts of self-control expend a limited resource. In the short term, overuse of self-control leads to the depletion of that resource. However, in the long term, the use of self-control can strengthen and improve the ability to control oneself over time. Self-control is also a key concept in the general theory of crime, a major theory in criminology. The theory was developed by Michael Gottfredson and Travis Hirschi in their book ''A General Theory of Crime'' (1990). Gottfredson and Hirschi define self-control as the differentiating tendency of individuals to avoid criminal acts indepen ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Projection Bias
Projection or projections may refer to: Physics * Projection (physics), the action/process of light, heat, or sound reflecting from a surface to another in a different direction * The display of images by a projector Optics, graphics, and cartography * Map projection, reducing the surface of a three-dimensional planet to a flat map * Graphical projection, the production of a two-dimensional image of a three-dimensional object Chemistry * Fischer projection, a two-dimensional representation of a three-dimensional organic molecule * Haworth projection, a way of writing a structural formula to represent the cyclic structure of monosaccharides * Natta projection, a way to depict molecules with complete stereochemistry in two dimensions in a skeletal formula * Newman projection, a visual representation of a chemical bond from front to back Mathematics * Projection (mathematics), any of several different types of geometrical mappings ** Projection (linear algebra), a linear transf ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Hyperbolic Discounting
In economics, hyperbolic discounting is a time inconsistency, time-''inconsistent'' model of delay discounting. It is one of the cornerstones of behavioral economics and its brain-basis is actively being studied by neuroeconomics researchers. According to the discounted utility approach, intertemporal choices are no different from other choices, except that some consequences are delayed and hence must be anticipated and discounted (i.e., reweighted to take into account the delay). Given two similar rewards, humans show a preference for one that arrives in a more prompt timeframe. Humans are said to ''discount'' the value of the later reward, by a factor that increases with the length of the delay. In the financial world, this process is normally modeled in the form of exponential discounting, a time-''consistent'' model of discounting. Many psychological studies have since demonstrated deviations in instinctive preference from the constant discount rate assumed in exponential disc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Human
Humans (''Homo sapiens'') or modern humans are the most common and widespread species of primate, and the last surviving species of the genus ''Homo''. They are Hominidae, great apes characterized by their Prehistory of nakedness and clothing#Evolution of hairlessness, hairlessness, bipedality, bipedalism, and high Human intelligence, intelligence. Humans have large Human brain, brains, enabling more advanced cognitive skills that facilitate successful adaptation to varied environments, development of sophisticated tools, and formation of complex social structures and civilizations. Humans are Sociality, highly social, with individual humans tending to belong to a Level of analysis, multi-layered network of distinct social groups — from families and peer groups to corporations and State (polity), political states. As such, social interactions between humans have established a wide variety of Value theory, values, norm (sociology), social norms, languages, and traditions (co ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Empirical
Empirical evidence is evidence obtained through sense experience or experimental procedure. It is of central importance to the sciences and plays a role in various other fields, like epistemology and law. There is no general agreement on how the terms ''evidence'' and ''empirical'' are to be defined. Often different fields work with quite different conceptions. In epistemology, evidence is what justifies beliefs or what determines whether holding a certain belief is rational. This is only possible if the evidence is possessed by the person, which has prompted various epistemologists to conceive evidence as private mental states like experiences or other beliefs. In philosophy of science, on the other hand, evidence is understood as that which '' confirms'' or ''disconfirms'' scientific hypotheses and arbitrates between competing theories. For this role, evidence must be public and uncontroversial, like observable physical objects or events and unlike private mental states, so ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rational Choice Theory
Rational choice modeling refers to the use of decision theory (the theory of rational choice) as a set of guidelines to help understand economic and social behavior. The theory tries to approximate, predict, or mathematically model human behavior by analyzing the behavior of a rational actor facing the same costs and benefits.Gary Browning, Abigail Halcli, Frank Webster (2000). ''Understanding Contemporary Society: Theories of the Present'', London: Sage Publications. Rational choice models are most closely associated with economics, where mathematical analysis of behavior is standard. However, they are widely used throughout the social sciences, and are commonly applied to cognitive science, criminology, political science, and sociology. Overview The basic premise of rational choice theory is that the decisions made by individual actors will collectively produce aggregate social behaviour. The theory also assumes that individuals have preferences out of available choice ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Exponential Discounting
In economics, exponential discounting is a specific form of the discount function, used in the analysis of choice over time (with or without uncertainty). Formally, exponential discounting occurs when total utility is given by U \Bigl(\_^ \Bigr) = \sum_^ \delta^(u(c_t)) where is consumption at time , is the exponential discount factor, and is the instantaneous utility function. In continuous time, exponential discounting is given by U \Bigl(\_^ \Bigl) = \int_^ e^u(c(t))\,dt Exponential discounting implies that the marginal rate of substitution between consumption at any pair of points in time depends only on how far apart those two points are. Exponential discounting is not dynamically inconsistent. A key aspect of the exponential discounting assumption is the property of dynamic consistency— preferences are constant over time. In other words, preferences do not change with the passage of time unless new information is presented. For example, consider an investment o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Utility
In economics, utility is a measure of a certain person's satisfaction from a certain state of the world. Over time, the term has been used with at least two meanings. * In a normative context, utility refers to a goal or objective that we wish to maximize, i.e., an objective function. This kind of utility bears a closer resemblance to the original utilitarian concept, developed by moral philosophers such as Jeremy Bentham and John Stuart Mill. * In a descriptive context, the term refers to an ''apparent'' objective function; such a function is revealed by a person's behavior, and specifically by their preferences over lotteries, which can be any quantified choice. The relationship between these two kinds of utility functions has been a source of controversy among both economists and ethicists, with most maintaining that the two are distinct but generally related. Utility function Consider a set of alternatives among which a person has a preference ordering. A utility fu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Weighting
The process of frequency weighting involves emphasizing the contribution of particular aspects of a phenomenon (or of a set of data) over others to an outcome or result; thereby highlighting those aspects in comparison to others in the analysis. That is, rather than each variable in the data set contributing equally to the final result, some of the data is adjusted to make a greater contribution than others. This is analogous to the practice of adding (extra) weight to one side of a pair of scales in order to favour either the buyer or seller. While weighting may be applied to a set of data, such as epidemiological data, it is more commonly applied to measurements of light, heat, sound, gamma radiation, and in fact any stimulus that is spread over a spectrum A spectrum (: spectra or spectrums) is a set of related ideas, objects, or properties whose features overlap such that they blend to form a continuum. The word ''spectrum'' was first used scientifically in optics t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economic Model
An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed to illustrate complex processes. Frequently, economic models posit structural parameters. A model may have various exogenous variables, and those variables may change to create various responses by economic variables. Methodological uses of models include investigation, theorizing, and fitting theories to the world. Overview In general terms, economic models have two functions: first as a simplification of and abstraction from observed data, and second as a means of selection of data based on a paradigm of econometric study. ''Simplification'' is particularly important for economics given the enormous complexity of economic processes. This complexity can be attributed to the diversity of factors that determine economic activity; t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Retirement
Retirement is the withdrawal from one's position or occupation or from one's active working life. A person may also semi-retire by reducing work hours or workload. Many people choose to retire when they are elderly or incapable of doing their job for health reasons. People may also retire when they are eligible for private or public pension benefits, although some are forced to retire when bodily conditions no longer allow the person to work any longer (by illness or accident) or as a result of legislation concerning their positions. In most countries, the idea of retirement is of recent origin, being introduced during the late-nineteenth and early-twentieth centuries. Previously, low life expectancy, lack of social security and the absence of pension arrangements meant that most workers continued to work until their death. Germany was the first country to introduce retirement benefits in 1889. Nowadays, most developed countries have systems to provide pensions on retirement in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
