Monday, September 16, 2013

Stephen Grossberg: Cooperation, competition, preference, and rational decision making

Stephen Grossberg belongs to the central founders of the fields of computational neuroscience, connectionist cognitive science, and neuromorphic technology. He has studied how brains give rise to minds since he took the introductory psychology course as a freshman at Dartmouth College in 1957. At that time, Grossberg presented the idea of using nonlinear systems of differential equations to show how brain mechanisms can give rise to behavioral functions. Grossberg founded and was first President of the International Neural Network Society (INNS). The formation of INNS soon led to the formation of the European Neural Network Society (ENNS) and the Japanese Neural Network Society (JNNS). With Gail Carpenter, Grossberg developed the adaptive resonance theory (ART). ART is a theory of how the brain can quickly learn, and stably remember and recognize, objects and events in a changing world.

The European Neural Network Society organizes annually International Conference on Neural Networks (ICANN). The first ICANN was organized in Finland in 1991. This year the conference was organized in Sofia, Bulgaria at the Technical University of Sofia in collaboration with Institute of Information and Communication Technologies, Bulgarian Academy of Sciences and Union of Automatic and Informatics.

With Erkki Oja, Karlheinz Meier, Nikola Kasabov, Alessandro E. P. Villa and Günther Palm, Stephen Grossberg was a plenary speaker of ICANN 2013. Grossberg's topic was "Behavioral economics and neuroeconomics: Cooperation, competition, preference, and decision making". The general themes of Grossberg's talk were

  • how understanding human cognition, emotion, and decision making can impact economic theory, and
  • how mathematical understanding of cooperative-competitive dynamics can impact economic theory.

The Nobel prize-winning work of Kahneman and Tversky on Prospect Theory is an illustrative example of the first item. Grossberg's talk showed how properties of cooperative-competitive and cognitive- emotional neural systems that were developed to explain large behavioral and neural data bases exhibit emergent properties that are economically relevant, including results about the voting paradox, the Invisible Hand, how to design stable economic markets, irrational decision making under risk (Prospect Theory), probabilistic decision making, preferences for previously unexperienced alternatives over rewarded experiences, and bounded rationality.

Neural mechanisms that have been selected by evolution because they support adaptive behaviors that are crucial for survival can give rise to irrational behaviors when they are exposed to certain environments. Occasional irrational behavior is the price we pay for adaptive processes: it is a part of the "human condition". Grossberg continued by asking two important questions: (1) What design principles and mechanisms have been selected by evolution? (2) How do certain environments contextually trigger irrational decisions? He provided answers through describing his widely used equations on short-term (activation), medium-term (habituation) and long-term (learning) memory. He showed how a correct form of these equations can help to explain a wide range of data about behavioral economics and neuroeconomics.

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