Complexity Aversion: Simplification in the Herrnstein and Allais Behaviors
The sub-optimal "meliorating" behavior studied by Herrnstein shows that all known animal species match average and not marginal payoffs. When information processing is costly, Herrnstein’s matching and a similar simplifying "paradox" discovered by Allais may be efficient for agents averse to the risk of making errors. Such simplification is likely to be an evolutionarily stable strategy. Differential aversion to errors can lead to different estimates, even without differences in estimating ability.
Volume (Year): 23 (1997)
Issue (Month): 1 (Winter)
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