Rational choice and rational expectations

Tshilidzi Marwala, Evan Hurwitz

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

1 Citation (Scopus)

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 options available to select an optimal choice. This chapter investigates what happens when decisions are made by artificial intelligent machines in the market rather than human beings. Firstly, the expectations of the future are more consistent if they are made by artificial intelligent machines than if they are made by human beings in that the bias and the variance of the error of the predictions are reduced. Furthermore, the decisions that are made are more rational and thus the marketplace becomes more rational.

Original languageEnglish
Title of host publicationAdvanced Information and Knowledge Processing
PublisherSpringer London
Pages27-40
Number of pages14
Edition9783319661032
DOIs
Publication statusPublished - 2017

Publication series

NameAdvanced Information and Knowledge Processing
Number9783319661032
ISSN (Print)1610-3947
ISSN (Electronic)2197-8441

ASJC Scopus subject areas

  • Management Information Systems
  • Information Systems
  • Information Systems and Management
  • Artificial Intelligence

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