1 option
Thinking ahead : the decision problem / Patrick Bolton, Antoine Faure-Grimaud.
- Format:
- Book
- Author/Creator:
- Bolton, Patrick, 1957- author.
- Faure-Grimaud, Antoine, author.
- Series:
- Working Paper Series (National Bureau of Economic Research) ; Number w11867.
- Working Paper Series (National Bureau of Economic Research) ; Number w11867
- Language:
- English
- Subjects (All):
- Decision making--Econometric models.
- Decision making.
- Physical Description:
- 1 online resource (46 pages) : illustrations.
- Place of Publication:
- Cambridge, Massachusetts : National Bureau of Economic Research, 2005.
- Summary:
- We propose a model of bounded rationality based on time-costs of deliberating current and future decisions. We model an individual decision maker's thinking process as a thought-experiment that takes time and let the decision maker "think ahead" about future decision problems in yet unrealized states of nature. By formulating an intertemporal, state-contingent, planning problem, which may involve costly deliberation in every state of nature, and by letting the decision-maker deliberate ahead of the realization of a state, we attempt to capture the basic idea that individuals generally do not think through a complete action-plan. Instead, individuals prioritize their thinking and leave deliberations on less important decisions to the time or event when they arise.
- Notes:
- Description based on publisher supplied metadata and other sources.
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