We show that whenever a decision maker reasons about an optimal decision he is able to find one, even with non-transitive preferences. The existence of a reasoning process allows him to strategically manipulate how he reasons. A reasoning strategy that is robust against (finite) deviations is captured by the notion of cognitive equilibrum. We show that a cognitive equilibrium exists under all complete preferences, and characterize outcomes that can be implemented within it. Cognitive equilibria employ complex cognitive strategies. Simple strategies suffice only under transitive preferences. Robustness of the model is evaluated in the language of von Neumann-Morgenstern stable sets.
|Date of creation:||Sep 2007|
|Contact details of provider:|| Postal: Rehtorinpellonkatu 3, FIN-20500 TURKU|
Phone: +358 2 333 51
Web page: http://ace-economics.fi
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:tkk:dpaper:dp20. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aleksandra Maslowska)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.