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Technical Report: UTEP-CS-14-62a


Starting from well-known studies by Kahmenan and Tarsky, researchers have found many examples when our decision making -- and our decision making -- seem to be irrational. In this chapter, we show that this seemingly irrational decision making can be explained if we take into account that human abilities to process information are limited; as a result, instead of the exact values of different quantities, we operate with granules that contain these values. On several examples, we show that optimization under such granularity restriction indeed leads to observed human decision making. Thus, granularity helps explain seemingly irrational human decision making.

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