Ulric B. and Evelyn L. Bray Social Sciences Seminar

Wednesday December 2, 2020 12:00 PM

Behavioral Neural Networks

Speaker: Shaowei Ke, Department of Economics, University of Michigan
Location: Online Event

Abstract: We provide an axiomatic foundation for a class of neural-network models applied to decision-making under risk, called neural-network expected utility (NEU) models. Motivated by classic experimental findings, we weaken the independence axiom in a novel way. We show how to use simple neurons, referred to as behavioral neurons, in NEU models to capture behavioral effects, such as the certainty effect and reference dependence. Empirically, we show that some simple NEU model with natural interpretation predicts better than existing theories, such as expected utility theory and cumulative prospect theory out of sample, and that behavioral neurons help improve NEU models' performance.

Written with Chen Zhao, Zhaoran Wang, and Sung-Lin Hsieh. Professor Ke will be joined by guests Pietro Ortoleva and Paulo Natenzon.

How to view the seminar:
Sign up for a free twitch.tv account, and tune in on Wednesdays at noon pacific time on twitch.tv/caltechecontheory. You will be able to ask questions on the twitch chat.

Series Ulric B. and Evelyn L. Bray Social Sciences Seminar Series

Contact: Letty Diaz at 626-395-1255 letty.diaz@caltech.edu