Research Talk: Bounding Rationality by Computational Complexity
- Monday, May 4, 2015 from 4:00pm to 5:00pm
- Chemistry and Biochemistry Building - view map
Bounding Rationality by Computational Complexity
Professor and Chair of the School of Computer Science
College of Computing, Georgia Institute of Technology
Traditional microeconomic theory treats individuals and institutions of completely understanding the consequences of their decisions given the information they have available. These assumptions may not be valid as we might have to solve hard computational problems to optimize our choices. What happens if we restrict the computational power of economic agents?
There has been some work in economics treating computation as a fixed cost or simply considering the size of a program. This talk will explore a new direction bringing the rich tools of computational complexity into economic models, a tricky prospect where even basic concepts like "input size" are not well defined.
We show how to incorporate computational complexity into a number of economic models including game theory, prediction markets, forecast testing, preference revelation and awareness.
This talk will not assume any background in either economics or computational complexity.