ECONOMIC APPLICATIONS OF FUZZY SUBSET THEORY AND FUZZY LOGIC: A BRIEF SURVEY

Traditional mathematics is the language of precision. Statements are either true or false. But, in reality there are few things that are truly simply true or false. Life is full of shades of grey. Capturing these shades of grey has been problematic using traditional mathematics. Mathematics can model the uncertainty itself but rarely incorporates it into the model. However, an emerging area of mathematical inquiry known as the mathematics of uncertainty seeks to overcome some of these problems by integrating the uncertainly, the shades of grey, directly into the model. Fuzzy theory is one of those emerging ideas. This paper is simply an overview of some of the basic mechanics of fuzzy theory and recent economic applications in both micro and macro-economics.