Nominalist Heuristics and Economic Theory

Arbeitspapier

This paper introduces a new theoretic entity, a nominalist heuristic, defined as a focus on prominent numbers, indices or ratios. Abstractions used in the evaluation stage of decision making typically involve nominalist heuristics that are incompatible with expected utility theory which excludes the evaluation stage, and are also incompatible with prospect theory which assumes that, while the evaluation procedure can involve systematic mistakes, the overall decision situation is nevertheless sufficiently simple: 1) for economists and psychologists to identify what is a mistake, and 2) to be compatible with maximisation. But in the typical complex situation giving rise to nominalist heuristics neither 1) nor 2) hold, and therefore what is required is a fundamentally different class of models that allow for the progressive anticipated changes in knowledge ahead faced under risk and uncertainty, namely models under the umbrella of SKAT, the Stages of Knowledge Ahead Theory. A sequel paper. Pope et al 2009b, shows field and laboratory evidence of heuristics in the form of prominent numbers entering exchange rate determination.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Bonn Econ Discussion Papers ; No. 17/2009

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Information, Knowledge, and Uncertainty: General ; Criteria for Decision-Making under Risk and Uncertainty ; Foreign Exchange ; International Monetary Arrangements and Institutions
• Thema: nominalism ; money illusion ; heuristic ; unpredictability ; experiment ; SKAT the Stages of Knowledge Ahead Theory ; prominent numbers ; prominent indices ; prominent ratios ; equality ; historical benchmarks ; complexity ; decision costs ; evaluation ; Entscheidungstheorie ; Wissen ; Kognition ; Heuristisches Verfahren ; Wirtschaftstheorie ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Pope, Robin ; Selten, Reinhard ; Kube, Sebastian
• Ereignis: Veröffentlichung
• (wer): University of Bonn, Bonn Graduate School of Economics (BGSE)
• (wo): Bonn
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/37043
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ