Recent research in neuropsychology shows that emotions play a balancing role in rationality in behavior and decision-making. Moreover, social sciences indicate the functional role of the emotions in behavior during social interaction. In a social interaction, the rational agents cannot only be based on mechanisms binding beliefs, desires and intentions any more without considering the influence...

We consider general economies in which rational agents interact locally. The local aspect of the interactions is designed to capture in a simple abstract way social interactions, that is, socio-economic environments in which markets do not mediate all of agents’ choices, and each agent’s choice might be in part determined, for instance, by family, peer group, or ethnic group effects. We study s...

This paper offers an alternative explanation for what is typically referred to as an asset pricing bubble. We develop a model that formalizes the Cochrane (2002) convenience yield theory of technology company stocks to explain why a rational agent would buy an “overpriced” security. Agents have a desire to trade but short-sale restrictions and other frictions limit their trading strategies and ...

We analyse scenarios in which individually rational agents negotiate with each other in order to agree on deals to exchange resources. We consider two variants of the framework, one where agents can use money to compensate other agents for disadvantageous deals, and another one where this is not possible. In both cases, we analyse what types of deals are necessary and sufficient to guarantee an...

In the classic AGM belief revision theory, beliefs are static and do not change their own shape. For instance, if p is accepted by a rational agent, it will remain p to the agent. But such rarely happens to us. Often, when we accept some information p, what is actually accepted is not the whole p, but only a portion of it; not necessarily because we select the portion but because p must be perc...

In this paper we present a model for coalition formation and payo distribution in general environments. We focus on a reduced complexity kernel-oriented coalition formation model, and provide a detailed algorithm for the activity of the single rational agent. The model is partitioned into a social level and a strategic level, to distinguish between regulations that must be agreed upon and are f...

I develop a framework in which a principal can exploit myopic social learning in a population of agents in order to implement social or selfish outcomes that would not be possible under the traditional fully-rational agent model. Learning in this framework takes a simple form of imitation, or replicator dynamics, a class of learning dynamics that often leads the population to converge to a Nash...

In this paper we present our preliminary investigation of rational agents who can learn from their experience. We claim that such agents need to combine at least three attributes – deductive reasoning based on currently possessed knowledge, inductive learning from their history, and awareness of passing time (including the necessity to commit computational resources to tasks which need to be ca...

This article shows how uninformed but rational voters can respond intelligently to political advertising. The article models a situation where a candidate must rely on a pressure group for financing political advertising and making endorsements. The pressure group uses its power over the purse to influence the position chosen by the candidate. Nevertheless, when uninformed voters use a strategi...

In this paper we discuss the role of emotions in artificial agent design, and the use of logic in reasoning about the emotional or affective states an agent can reside in. We do so by extending the KARO framework for reasoning about rational agents appropriately. In particular we formalize in this framework how emotions are related to the action monitoring capabilities of an agent.