Sequential decision making without independence: a new conceptual approach
AbstractThis paper is a critical reflection on the notion of dynamic consistency that is commonly used in the literature in Economics and Decision Theory and on the difficulty to test it in an experimental set up. Building on the possible characteristics of individual dynamic preferences, we propose a conceptual categorisation of possible sequential decision making behaviors. In particular, we show that not conforming to Expected Utility Theory does not necessarily implies a violation of dynamic consistency and propose a simple set of decision tasks that allows to reveal different strategic types of resolution of a sequential decision problem by a non-expected utility maximizers.
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Bibliographic InfoPaper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 12-27.
Length: 30 pages
Date of creation: Sep 2012
Date of revision: Sep 2012
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Postal: Avenue Raymond Dugrand, CS 79606, 34960 Montpellier Cedex 2
Web page: http://www.lameta.univ-montp1.fr/
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-22 (All new papers)
- NEP-CBE-2012-09-22 (Cognitive & Behavioural Economics)
- NEP-EVO-2012-09-22 (Evolutionary Economics)
- NEP-GTH-2012-09-22 (Game Theory)
- NEP-HPE-2012-09-22 (History & Philosophy of Economics)
- NEP-MIC-2012-09-22 (Microeconomics)
- NEP-UPT-2012-09-22 (Utility Models & Prospect Theory)
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