Cognitive Equilibrium

Arbeitspapier

We show that whenever a decision maker reasons about an optimal decision he is able to find one, even with non-transitive preferences. The existence of a reasoning process allows him to strategically manipulate how he reasons. A reasoning strategy that is robust against (finite) deviations is captured by the notion of cognitive equilibrum. We show that a cognitive equilibrium exists under all complete preferences, and characterize outcomes that can be implemented within it. Cognitive equilibria employ complex cognitive strategies. Simple strategies suffice only under transitive preferences. Robustness of the model is evaluated in the language of von Neumann-Morgenstern stable sets.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion paper ; No. 20

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Theory ; Information and Uncertainty: Other
• Subject: procedural rationality ; non-transitive preferences ; cognitive equilibrium

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vartiainen, Hannu
• Event: Veröffentlichung
• (who): Aboa Centre for Economics (ACE)
• (where): Turku
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/233236
• Last update: 10.03.2025, 11:44 AM CET