Artikel
Boundedly rational backward induction
This paper proposes simple axioms that characterize a generalization of backward induction. At any node of a decision tree, the decision maker looks forward a fixed number of stages perfectly. Beyond that, the decision maker aggregates continuation values according to a function that captures reasoning under unpredictability. The model is uniquely identified from the decision maker's preference over decision trees. Confronting a decision tree, the decision maker iteratively revises her plan for the future as she moves forward in the decision tree. A comparative measure of unpredictability aversion and several examples are discussed.
- Language
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Englisch
- Bibliographic citation
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Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 14 ; Year: 2019 ; Issue: 1 ; Pages: 103-134 ; New Haven, CT: The Econometric Society
- Classification
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Wirtschaft
Microeconomics: General
- Subject
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Dynamic choice
imperfect foresight
time inconsistency
- Event
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Geistige Schöpfung
- (who)
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Ke, Shaowei
- Event
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Veröffentlichung
- (who)
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The Econometric Society
- (where)
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New Haven, CT
- (when)
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2019
- DOI
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doi:10.3982/TE2402
- Handle
- Last update
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10.03.2025, 11:41 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Ke, Shaowei
- The Econometric Society
Time of origin
- 2019
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