IDEAS home Printed from https://ideas.repec.org/p/nwu/cmsems/1283.html
   My bibliography  Save this paper

Randomization and Simplification

Author

Listed:
  • Ehud Kalai
  • Eilon Solan

Abstract

Randomization may add beneficial flexibility to the construction of optimal simple decision rules in dynamic environments. A decision maker, restricted to the use of simple rules, may find a stochastic rule that strictly outperforms all deterministic ones. This is true even in highly separable Markovian environments where the set of feasible choices is stationary and the decision maker's choices have no influence on future payoff functions. In separable environments, however, the period selection of an action can still be deterministic; only the transitions in the evolution of his behavior may require randomization.

Suggested Citation

  • Ehud Kalai & Eilon Solan, 2000. "Randomization and Simplification," Discussion Papers 1283, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1283
    as

    Download full text from publisher

    File URL: http://www.kellogg.northwestern.edu/research/math/papers/1283.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March.
    2. Piccione, Michele & Rubinstein, Ariel, 1997. "On the Interpretation of Decision Problems with Imperfect Recall," Games and Economic Behavior, Elsevier, vol. 20(1), pages 3-24, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jude Kline, J., 2002. "Minimum Memory for Equivalence between Ex Ante Optimality and Time-Consistency," Games and Economic Behavior, Elsevier, vol. 38(2), pages 278-305, February.
    2. Andrés Perea & Elias Tsakas, 2019. "Limited focus in dynamic games," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(2), pages 571-607, June.
    3. Vitaly Pruzhansky, 2003. "Maximin Play in Two-Person Bimatrix Games," Tinbergen Institute Discussion Papers 03-101/1, Tinbergen Institute.
    4. Sacha Bourgeois-Gironde, 2017. "How regret moves individual and collective choices towards rationality," Chapters, in: Morris Altman (ed.), Handbook of Behavioural Economics and Smart Decision-Making, chapter 11, pages 188-204, Edward Elgar Publishing.
    5. Lau, Sau-Him Paul, 2001. "Aggregate Pattern of Time-dependent Adjustment Rules, II: Strategic Complementarity and Endogenous Nonsynchronization," Journal of Economic Theory, Elsevier, vol. 98(2), pages 199-231, June.
    6. Koessler, Frederic & Laclau, Marie & Renault, Jérôme & Tomala, Tristan, 2022. "Long information design," Theoretical Economics, Econometric Society, vol. 17(2), May.
    7. Philippe Jehiel & Jakub Steiner, 2020. "Selective Sampling with Information-Storage Constraints [On interim rationality, belief formation and learning in decision problems with bounded memory]," The Economic Journal, Royal Economic Society, vol. 130(630), pages 1753-1781.
    8. von Stengel, Bernhard & Koller, Daphne, 1997. "Team-Maxmin Equilibria," Games and Economic Behavior, Elsevier, vol. 21(1-2), pages 309-321, October.
    9. Dirk Bergemann & Stephen Morris, 2019. "Information Design: A Unified Perspective," Journal of Economic Literature, American Economic Association, vol. 57(1), pages 44-95, March.
    10. Philippe Jehiel, 2022. "Analogy-Based Expectation Equilibrium and Related Concepts:Theory, Applications, and Beyond," Working Papers halshs-03735680, HAL.
    11. Jorge M. Streb & Gustavo Torrens, 2011. "Meaningful talk," CEMA Working Papers: Serie Documentos de Trabajo. 443, Universidad del CEMA, revised May 2017.
    12. Gilboa Itzhak & Schmeidler David, 1994. "Infinite Histories and Steady Orbits in Repeated Games," Games and Economic Behavior, Elsevier, vol. 6(3), pages 370-399, May.
    13. Van Damme, Eric, 2002. "Strategic equilibrium," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 3, chapter 41, pages 1521-1596, Elsevier.
    14. Vida, Péter & Āzacis, Helmuts, 2013. "A detail-free mediator," Games and Economic Behavior, Elsevier, vol. 81(C), pages 101-115.
    15. Oriol Carbonell-Nicolau, 2021. "Equilibria in infinite games of incomplete information," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(2), pages 311-360, June.
    16. Konstantinos Georgalos & Indrajit Ray & Sonali SenGupta, 2020. "Nash versus coarse correlation," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1178-1204, December.
    17. Antonio Cabrales & Michalis Drouvelis & Zeynep Gurguy & Indrajit Ray, 2017. "Transparency is Overrated: Communicating in a Coordination Game with Private Information," CESifo Working Paper Series 6781, CESifo.
    18. Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2020. "Memory, Attention, and Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(3), pages 1399-1442.
    19. Zhigang Cao, 2011. "Remarks on Bargaining and Cooperation in Strategic Form Games," Discussion Paper Series dp565, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    20. Chiara Scarampi & Richard Fairchild & Luca Fumarco & Alberto Palermo & Neal Hinvest, 2021. "Social Metacognition: A Correlational Device for Strategic Interactions," Working Papers 2111, Tulane University, Department of Economics.

    More about this item

    Keywords

    Markovian decision making; simple strategies; automata; deterministic decision rules; random decision rules;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nwu:cmsems:1283. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fran Walker (email available below). General contact details of provider: https://edirc.repec.org/data/cmnwuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.