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The Foundations of Imperfect Decision Making

  • Tyson, Chris

    (Stanford U)

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    A theory of decision-making is proposed that speaks to Herbert Simon's methodological critique of economics without resorting to excessive reductionism. Formally, the new theory removes the Contraction axiom of conventional choice theory (which is itself reviewed in detail). In its interpretation, the theory reflects a conceit that decision makers may not fully perceive their preferences among alternatives, with perceived preference being assumed to possess different sets of properties. A utility-based representation of the postulated behavior is obtained, and is seen to be reminiscent of Simon's notion of "satisficing."

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    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1714.pdf
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    Paper provided by Stanford University, Graduate School of Business in its series Research Papers with number 1714.

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    Date of creation: Nov 2001
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    Handle: RePEc:ecl:stabus:1714
    Contact details of provider: Postal: Stanford University, Stanford, CA 94305-5015
    Phone: (650) 723-2146
    Fax: (650)725-6750
    Web page: http://gsbapps.stanford.edu/researchpapers/
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