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Elements Of Human Decision-Making, Jens G. Pohl
Elements Of Human Decision-Making, Jens G. Pohl
Collaborative Agent Design (CAD) Research Center
The purpose of this paper is to present some understandings of the human problem-solving activity that we have gained in the Collaborative Agent Design Research Center (CADRC) over the past two decades. Since we feel strongly that the human decision-maker should be an integral component of any computer-based decision-support system, it follows that we would have endeavored to incorporate many of the elements that appear to be important to the user in the design of these systems. The complexity of the human cognitive system is evidenced by the large body of literature that describes problem-solving behavior and the relatively fewer …
The Forward Premium In A Model With Heterogeneous Prior Beliefs, Eric O'N. Fisher
The Forward Premium In A Model With Heterogeneous Prior Beliefs, Eric O'N. Fisher
Economics
This paper explores a model of bond prices where agents have diverse prior beliefs about domestic and foreign inflation. In the long run, the foreign exchange forward premium reflects expected differences in inflation, but in the short run, it depends upon the diversity of prior beliefs. If some people have diffuse priors about a country's inflation process, then its currency commands a forward premium that is eventually dissipated. Using data on the dollar–mark premium from the 1980s, it shows that this kind of diversity really matters. Thus models with a single representative agent give an inadequate description of the data.