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2018 | Buch

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Decision Economics: In the Tradition of Herbert A. Simon's Heritage

Distributed Computing and Artificial Intelligence, 14th International Conference

herausgegeben von: Edgardo Bucciarelli, Shu-Heng Chen, Juan M. Corchado

Verlag: Springer International Publishing

Buchreihe : Advances in Intelligent Systems and Computing

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

The special session on Decision Economics (DECON) is a scientific forum held annually and intended to share ideas, projects, research results, models and experiences associated with the complexity of behavioural decision processes and socio‐economic phenomena. DECON 2017 was held at the Polytechnic of Porto, ISEP, Portugal, as part of the 14th International Conference on Distributed Computing and Artificial Intelligence.

For the second consecutive year, the Editors of this book have drawn inspiration from Herbert A. Simon’s immense body of work and argue that Simon precipitated something akin to a revolution in microeconomics focused on the concept of decision‐making. Further, it is worth noting that the recognition of relevant decision‐making takes place in a range of critical subject areas and research fields, including economics, finance, information systems, small and international business management, operations, and production. Therefore, decision‐making issues are of fundamental importance in all branches of economics addressed both deductively and inductively.

Not surprisingly, the study of decision‐making has seen growing empirical research efforts in the economic literature over the last sixty years and, more recently, a variety of insightful cutting‐edge experimental, behavioural and computational approaches. Additionally, the awareness regarding generalizations and reductions to express economic concepts has led, on the one hand, to an increasing risk of spreading the language of mathematics as a rhetorical tool and, on the other hand, to an oversimplification and overlooking of some crucial details, especially when it comes to human decisions and, hence, economic behaviour. That awareness, however, has helped to produce an extraordinary volume of empirical research aimed at discovering how economic agents cope with complex decisions.

In this sense, the international scientific community acknowledges Herbert A. Simon’s research endeavours to understand the processes involved in economic decision‐making and their implications for the advancement of economic professions. Within the field of decision‐making, indeed, Simon’s rejection of the standard decision‐making models used in neoclassical economics inspired social scientists worldwide to develop research programmes in order to study decision‐making empirically. The main achievements concern decision‐making for individuals, firms, markets, governments, institutions, and, last but not least, science and research.

Inhaltsverzeichnis

Frontmatter

The Bayesian Cost–Effectiveness Decision Problem

Abstract

Cost–effectiveness analysis of medical treatments is a statistical decision problem whose aim is to choose an optimal treatment among a finite set of alternative treatments. It is assumed that the treatment selection is to be based on their cost and effectiveness.

In this paper we revise this statistical decision problem, discuss two utility functions, and assume Bayesian models for the cost and the effectiveness. For illustrating the performance of the utility functions an example with simulated data is presented.

Elías Moreno, Francisco-José Vázquez–Polo, Miguel A. Negrín, María Martel–Escobar

Evaluation of Scientific Production Without Using Bibliometric Indicators: Decision-Making on a Priori Criteria

Abstract

The present contribution contains the formalisation of a method (not based on bibliometric indicators) for assigning analytical scores to the scientific production of researchers who challenge in an open competitive exam in a Socioeconomic Scientific Sector. The preliminary decisions of the evaluation board are described subdividing them into six decision steps. The role of decision-making about a priori criteria is pointed out in relation to the respect of the researcher’s identity and of the spontaneous evolution of science. In this work, also an example of application is proposed to the evaluation board. Some algebraic implications are highlighted and it is suggested to reflect on the usefulness of the rules of Boole’s Algebra for the calculation of total scores deriving from the simultaneous application of criteria having different logical characteristics.

Carmen Pagliari, Nicola Mattoscio

Information Aggregation in Big Data: Wisdom of Crowds or Stupidity of Herds

Abstract

We are entering an age of big data in which our everyday lives depend on tremendous amounts of data and at the same time generate new data. However, the effect of this information convenience on the quality of our decision-making is still not clear. On the one hand, more information is expected to help people make better decisions by serving as the “wisdom of crowds”. On the other hand, imitation among interconnected agents may lead to the “stupidity of herds” with the result that most people will make worse choices. Using agent-based modeling, we explore the information aggregation behaviors of an interconnected population and study how the connectedness among agents influences the checks and balances between the “wisdom of crowds” and the “stupidity of herds”, as well as the decision quality of the agents. We find that in a population of interconnected agents with limited fact-checking capacity, a quasi-equilibrium with a small portion of agents making decisions based on fact checking and a large portion of agents following the majority can be achieved in the process of reinforcement learning. The effects of agents’ fact-checking capacity and search scope on herding behavior, decision quality, and the possibility of systemic failure are also investigated. It is interesting to find that the decision accuracy first increases and then decreases as the agents’ search scope goes up if the agents have a limited fact-checking capacity. This finding implies that a partially connected rather than a fully connected network is preferred from the viewpoint of information aggregation efficiency.

Tongkui Yu, Shu-Heng Chen, Connie Houning Wang

Designing and Programming a Graphical Interface to Evaluate Treatments in Economics Experiments

Abstract

In this paper, we develop a graphical interface that allows to calculate the efficacy of one or more treatments before adopting an experimental economics design. The graphical interface is built with Java according to a model-based treatment design. The aim is twofold. We are first interested in designing treatments in order to increase their efficacy, evaluating how experimental factors can affect the treatment process design. The second aim is to enhance the internal and external validity of the experiment to be run. The general idea behind this research is to implement a Graphical Experimenter Interface (GEI) capable to support economists when deciding which experimental treatment design to adopt and thus which factors to include.

Edgardo Bucciarelli, Assia Liberatore

A Decision Framework for Understanding Data-Aware Business Process Models

Abstract

Business Process Management is a discipline that enables organizations to analyze, design and deploy business processes, providing tools to investigate the processes from an organizational point of view and transforming the design into a working software implementation.

The Business Process Modeling and Notation (BPMN [1]) is the most widely adopted modeling language for designing and re-engineering business processes. One of best feature is that it provides a graphical representation that is not only easy to understand by business people without technical expertise but also machine processable, with tasks assigned to software or human agents based on the workflow and rules defined within the process.

This paper extends the framework presented by the author in [2] adding the possibility of verifying more properties of data-aware business processes using a novel approach. This approach enables the verification of the conformance to the business rules combining logic and mathematical expressions. Moreover, the new framework gives the possibility of separating the business requirements from the implementation, giving hints to the process designer and to the programmer. Finally, it gives directions for open research challenges.

Raffaele Dell’Aversana

Cluster Analysis as a Decision-Making Tool: A Methodological Review

Abstract

Cluster analysis has long played an important role in a broad variety of areas, such as psychology, biology, computer sciences. It has established as a precious tool for marketing and business areas, thanks to its capability to help in decision-making processes. Traditionally, clustering approaches concentrate on purely numerical or categorical data only. An important area of cluster analysis deals with mixed data, composed by both numerical and categorical attributes. Clustering mixed data is not simple, because there is a strong gap between the similarity metrics for these two kind of data. In this review we provide some technical details about the kind of distances that could be used with mixed-data types. Finally, we emphasize as in most applications of cluster analysis practitioners focus either on numeric or categorical variables, lessening the effectiveness of the method as a tool of decision-making.

Giulia Caruso, Stefano Antonio Gattone, Francesca Fortuna, Tonio Di Battista

Similar Patterns of Cultural and Creative Industries. A Preliminary Analysis Based on Self-Organized-Map to the Italian Case

Abstract

In recent years, there has been a widely belief that creativity, going hand in hand with innovation and knowledge creation, readily translates into regional competitiveness. In the same time, cultural and creative industries (CCI) industrial pattern have been attracting a growing interest from a wide range of academic research and policy interventions. The aim of this article is to establish a better understanding of relevant industry relevance (RIR) of geographic samples with a relevant similarity in terms of industrial patterns and not of industry concentration. In this sense, we move from a methodological approach, based on Self-Organizing Maps (SOM) by comparing patterns of local employment. The Italian case provides an interesting case study to analyze industrial patterns by offering new insights of occupational dynamics. We conclude that this paper represents a firs explorative attempt to extend the previous literature to seize the overall productive structure of the local creative economy.

Donatella Furia, Alessandro Crociata, Fabiano Compagnucci, Vittorio Carlei

Understanding Bruno de Finetti’s Decision Theory: A Basic Algorithm to Support Decision-Making Behaviour

Abstract

The aim of this work is to present an algorithm inspired to Bruno de Finetti’s decision theory, limited to the version proposed by him in the essay “La probabilità: guida nel pensare e nell’agire” released in 1965. This work is focused on decision theory within the subjective theory of probability conceived by de Finetti. It opens with a brief overview of his theory of probability, followed by a methodological analysis functional to introduce the renowned de Finetti’s example model given for the solution of decision problems. Starting from this example, this work presents a mathematical generalization of the decision algorithm. Afterwards, a real decisional algorithm written in mathematical-style pseudo code is developed. Finally, some conclusive remarks are discussed along with possible future developments.

Edgardo Bucciarelli, Nicola Mattoscio, Valentina Erasmo

FOREX Trading Strategy Optimization

Abstract

Developing robust trading rules for forex trading remains a significant challenge for both academics and practitioners. We employ a genetic algorithm to evolve a diverse set of profitable trading rules based on weighted moving average method. We use the daily closing rates between four pairs of currencies – EUR/USD, GBP/USD, USD/JPY, USD/CHF – to develop and evaluate our method. Results are presented for all four currency pairs over the 16 years from 2000 to 2015. Developed approach yields acceptably high returns on out-of-sample data. The rules obtained using our genetic algorithm result in significantly higher returns than those produced by rules identified through exhaustive search.

Svitlana Galeshchuk, Sumitra Mukherjee

Looking for Regional Convergence: Evidence from the Italian Case with Multivariate Adaptive Regression Splines

Abstract

This paper examines the role of data mining analysis in explaining the Italian regional dualism with the aim of suggesting economic policies to fill the existing socio-economic gaps. We analyze the 2004–2014 period exploiting the capacity of MARS model in finding relationships among data. In Italy, the presence of a North-South divide is well-known for decades and present for several social and economic aspects. Recent studies prove that strong differences exist also in the regional human capital. Thus, we search for the causes of the local differences, also considering the entrepreneurial vitality and the international trade leverage. Among several variables, MARS is useful in showing the actual determinants on which to intervene. This is possible by comparing regions grouped homogeneously into clusters using recent data. MARS results are used for policy suggestions with the aim of filling the income gap.

Iacopo Odoardi, Fabrizio Muratore, Edgardo Bucciarelli, Shu-Heng Chen

Information Manipulation and Web Credibility

Abstract

Fake information, news, and reviews are overloaded in the era of big data. We use an agent-based model to simulate social interaction between information producers and consumers. Whether the information producers manipulate true or fake information depends on individual consumers attitude to truth or presentation of information. Consumers adapt themselves to accept or reject information and may evolve or learn socially from the others. Honest and dishonest producers select production strategies and also evolve from the same type of producers. We unexpectedly find that dishonest producers may produce true information because consumers co-evolve with producers by raising their standard on truth of information. To prevent fake information diffusion, let consumers take social responsibility by raising standard on truth of information improving social welfare and web credibility in the era of information overload.

Te-Cheng Lu, Tongkui Yu, Shu-Heng Chen

A Data Mining Analysis of the Chinese Inland-Coastal Inequality

Abstract

As in many countries, even in China the socio-economic changes have affected income inequality in recent decades. The various economic opportunities have led to different paths of development causing severe disparities in GDP per capita level. In addition to the well-known Chinese rural/urban inequality, in this work we study the inland/coastal differences. There are many known causes of inequality, but we aim to discover the actual determinants of the local GDP and, therefore, of income in a period that includes the international economic crisis started in 2007. With this aim, we use different variables to obtain clusters of the Chinese provinces in the period 2004–2015 and, subsequently, we investigate the determinants of income with a multivariate adaptive regression splines (MARS). There is an extensive economic literature on the Chinese case: MARS allows us to integrate this literature enabling us to find which GDP determinants are the most relevant in the certain areas of China.

Shu-Heng Chen, Hung-Wen Lin, Edgardo Bucciarelli, Fabrizio Muratore, Iacopo Odoardi

The Cognitive Determinants of Social Capital. Does Culture Matter?

Abstract

This paper addresses the relationship between social capital and cultural access. In doing that we provide a conceptual framework by moving from a cultural economics standpoint and by applying a Simultaneous Equation Model (SEM). Some linkages and relationships emerge through the analysis of cultural participation as a proxy of cultural capital and the accumulation of two selected dimensions of social capital.

Alessandro Crociata, Donatella Furia, Massimiliano Agovino

A Unified Framework for Multicriteria Evaluation of Intangible Capital Assets Inside Organizations

Abstract

It is of high importance for modern organizations the capability concerning the internal metrics used to evaluate intangible assets within them, as it enables better governance and competitive advantages. This paper presents a unified framework to measure, assess and develop intangible capital assets within organizations giving the possibility of enhancing decision making within the operational and strategic governance. Once identified the assets under investigation, the idea is to focus on a method based on a data model approach.

Raffaele Dell’Aversana

Processing and Analysing Experimental Data Using a Tensor-Based Method: Evidence from an Ultimatum Game Study

Abstract

This work investigates how newer economic behavioural research can be applied to human group behaviour and how it can be enriched using a relatively novel knowledge discovery approach. Based on an ultimatum game study conducted in the context of an extra-lab experiment, the authors propose a tensor-based method to analyse their experimental results and, therefore, to address a multi-dimensional approach. The authors prove that subjects do not behave as game theory would predict, but rather they basically prefer fair divisions of gains. This evidence confirms significant implications for theories addressing the evolution of, and the mechanisms underpinning, human group behaviour in economics, cognitive, and organizational studies.

Edgardo Bucciarelli, Tony E. Persico

The Mediating Effect of the Absorptive Capacity in the International Entrepreneurial Orientation of Family Firms

Abstract

This paper analyzes the mediating effect of absorptive capacities (ACAP) on the impact of international entrepreneurial orientation on the international performance of family firms. We focus on family businesses because of their importance in generating employment and wealth. For data analysis, we used a structural equation model PLS-SEM. The main conclusions of this study are that the international performance of family firms can be explained by the influence of the international entrepreneurial orientation and that the absorptive capacity has a mediating role in the previous relationship.

Felipe Hernández-Perlines

Backmatter

Titel: Decision Economics: In the Tradition of Herbert A. Simon's Heritage
herausgegeben von: Edgardo Bucciarelli
Shu-Heng Chen
Juan M. Corchado
Verlag: Springer International Publishing
Electronic ISBN: 978-3-319-60882-2
Print ISBN: 978-3-319-60881-5
DOI: https://doi.org/10.1007/978-3-319-60882-2