Boundedly-Rational Fast-Tuning Control Theory and Statistical Mechanics

  • Michael CAMPBELL Aurislink

Abstract

We construct a model of control theory with "fast-tuning" of parameters related to the ambient dynamics of the system. The parameters are tuned ‘myopically’ (i.e., small changes are made), with a random perturbation that allows for a large net change with certain probability. This is modeled using a drift-diffusion stochastic partial differential equation. The idea is to model the bounded rationality of the agent (s) tuning the parameters - that is, they may not follow the optimal path for tuning because of the lack of complete information about the system, errors in judgment, and / or a desire to experiment and test other options.

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Published
2019-06-30
How to Cite
CAMPBELL, Michael. Boundedly-Rational Fast-Tuning Control Theory and Statistical Mechanics. Journal of Mathematical Economics and Finance, [S.l.], v. 5, n. 1, p. 7-18, june 2019. ISSN 2458-0813. Available at: <https://journals.aserspublishing.eu/jmef/article/view/3934>. Date accessed: 23 jan. 2022.