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Non-probabilistic decision making with memory constraints

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  • Vostroknutov, Alexander

Abstract

The single decision maker chooses one of the actions repeatedly. She chooses the action with the highest weighted average of the past payoffs. In the long run either the action with highest expected payoff or the action with highest minimal payoff is chosen depending on how weights evolve.

Suggested Citation

  • Vostroknutov, Alexander, 2012. "Non-probabilistic decision making with memory constraints," Economics Letters, Elsevier, vol. 117(1), pages 303-305.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:1:p:303-305
    DOI: 10.1016/j.econlet.2012.06.004
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    References listed on IDEAS

    as
    1. Huck Steffen & Sarin Rajiv, 2004. "Players With Limited Memory," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-27, September.
    2. Sarin, Rajiv & Vahid, Farshid, 2001. "Predicting How People Play Games: A Simple Dynamic Model of Choice," Games and Economic Behavior, Elsevier, vol. 34(1), pages 104-122, January.
    3. Sarin, Rajiv, 2000. "Decision Rules with Bounded Memory," Journal of Economic Theory, Elsevier, vol. 90(1), pages 151-160, January.
    4. Young, H. Peyton, 2009. "Learning by trial and error," Games and Economic Behavior, Elsevier, vol. 65(2), pages 626-643, March.
    5. Sarin, Rajiv & Vahid, Farshid, 1999. "Payoff Assessments without Probabilities: A Simple Dynamic Model of Choice," Games and Economic Behavior, Elsevier, vol. 28(2), pages 294-309, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Adaptive learning; Constrained memory; Bandit problems;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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