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Rational Choice and Artificial Intelligence

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  • Tshilidzi Marwala

Abstract

The theory of rational choice assumes that when people make decisions they do so in order to maximize their utility. In order to achieve this goal they ought to use all the information available and consider all the choices available to choose an optimal choice. This paper investigates what happens when decisions are made by artificially intelligent machines in the market rather than human beings. Firstly, the expectations of the future are more consistent if they are made by an artificially intelligent machine and the decisions are more rational and thus marketplace becomes more rational.

Suggested Citation

  • Tshilidzi Marwala, 2017. "Rational Choice and Artificial Intelligence," Papers 1703.10098, arXiv.org.
    • Handle: RePEc:arx:papers:1703.10098
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    File URL: http://arxiv.org/pdf/1703.10098
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    References listed on IDEAS

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    1. Ben Irons & Cameron Hepburn, 2007. "Regret Theory and the Tyranny of Choice," The Economic Record, The Economic Society of Australia, vol. 83(261), pages 191-203, June.
    2. Julio J. Rotemberg & Michael Woodford, 1997. "An Optimization-Based Econometric Framework for the Evaluation of Monetary Policy," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 297-361, National Bureau of Economic Research, Inc.
    3. Herbert A. Simon, 1991. "Bounded Rationality and Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 125-134, February.
    4. Ben S. Bernanke & Julio J. Rotemberg (ed.), 1997. "NBER Macroeconomics Annual 1997," MIT Press Books, The MIT Press, edition 1, volume 1, number 026252242x, December.
    5. Dixit, Avinash K., 1990. "Optimization in Economic Theory," OUP Catalogue, Oxford University Press, edition 2, number 9780198772101.
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    Cited by:

    1. Paliukas Vytautas & Savanevičienė Asta, 2018. "Harmonization of rational and creative decisions in quality management using AI technologies," Economics and Business, Sciendo, vol. 32(1), pages 195-208, November.

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