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Idealizations of Uncertainty, and Lessons from Artificial Intelligence

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  • Smith, Robert Elliott
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    At a time when economics is giving intense scrutiny to the likely impact of artificial intelligence (AI) on the global economy, this paper suggests the two disciplines face a common problem when it comes to uncertainty. It is argued that, despite the enormous achievements of AI systems, it would be a serious mistake to suppose that such systems, unaided by human intervention, are as yet any nearer to providing robust solutions to the problems posed by Keynesian uncertainty. Under the radically uncertain conditions, human decision-making (for all its problems) has proved relatively robust, while decision making relying solely on deterministic rules or probabilistic models is bound to be brittle. AI remains dependent on techniques that are seldom seen in human decision-making, including assumptions of fully enumerable spaces of future possibilities, which are rigorously computed over, and extensively searched. Discussion of alternative models of human decision making under uncertainty follows, suggesting a future research agenda in this area of common interest to AI and economics.

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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2016-7
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    File URL: https://www.econstor.eu/bitstream/10419/129754/1/853463719.pdf
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    Article provided by Kiel Institute for the World Economy (IfW) in its journal Economics: The Open-Access, Open-Assessment E-Journal.

    Volume (Year): 10 (2016)
    Issue (Month): ()
    Pages: 1-40

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    Handle: RePEc:zbw:ifweej:20167
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    1. Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
    2. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, Oxford University Press, vol. 69(1), pages 99-118.
    3. Benjamin Y. Hayden & Michael L. Platt, 2009. "The mean, the median, and the St. Petersburg paradox," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(4), pages 256-272, June.
    4. Anna Conte & John Hey, 2013. "Assessing multiple prior models of behaviour under ambiguity," Journal of Risk and Uncertainty, Springer, vol. 46(2), pages 113-132, April.
    5. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    6. Grazia Cecere, 2015. "The economics of innovation: a review article," The Journal of Technology Transfer, Springer, vol. 40(2), pages 185-197, April.
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