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Case-based learning with different similarity functions

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  • Guerdjikova, Ani

Abstract

The paper applies the rule for adaptation of the aspiration level suggested by Gilboa and Schmeidler to a situation in which the similarity between acts is represented by an arbitrary similarity function [Gilboa, I., Schmeidler, D., 1996. Case-based optimization. Games Econ. Behav. 15, 1-26]. I show that the optimality result derived by Gilboa and Schmeidler in general fails. With a concave similarity function, only corner acts are chosen in the limit. The optimality result can be reestablished by introducing convex regions into the similarity function and modifying the aspiration adaptation rule. A similarity function which is "sufficiently convex" allows approximating optimal behavior with an arbitrary degree of precision.

Suggested Citation

  • Guerdjikova, Ani, 2008. "Case-based learning with different similarity functions," Games and Economic Behavior, Elsevier, vol. 63(1), pages 107-132, May.
    • Handle: RePEc:eee:gamebe:v:63:y:2008:i:1:p:107-132
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    2. Todd Guilfoos & Andreas Duus Pape, 2020. "Estimating Case-Based Learning," Games, MDPI, vol. 11(3), pages 1-25, September.
    3. Huirong Zhang & Zhenyu Zhang & Lixin Zhou & Shuangsheng Wu, 2021. "Case-Based Reasoning for Hidden Property Analysis of Judgment Debtors," Mathematics, MDPI, vol. 9(13), pages 1-17, July.
    4. Eichberger, Jürgen & Guerdjikova, Ani, 2008. "Multiple Priors as Similarity Weighted Frequencies," Papers 08-07, Sonderforschungsbreich 504.
    5. Hamid, Alain & Heiden, Moritz, 2015. "Forecasting volatility with empirical similarity and Google Trends," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 62-81.
    6. Han Bleichrodt & Martin Filko & Amit Kothiyal & Peter P. Wakker, 2017. "Making Case-Based Decision Theory Directly Observable," American Economic Journal: Microeconomics, American Economic Association, vol. 9(1), pages 123-151, February.
    7. Golosnoy, Vasyl & Hamid, Alain & Okhrin, Yarema, 2014. "The empirical similarity approach for volatility prediction," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 321-329.
    8. Gayer, Gabrielle, 2010. "Perception of probabilities in situations of risk: A case based approach," Games and Economic Behavior, Elsevier, vol. 68(1), pages 130-143, January.
    9. Marco Sahm & Robert K. von Weizsäcker & Robert K. von Weizsäcker, 2014. "Reason, Intuition, and Time," CESifo Working Paper Series 5134, CESifo.

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