Dynamic Consistency in Extensive form Decision Problems
In a stimulating paper Piccione and Rubinstein (1997) argued how a decision maker could undertake dynamically inconsistent choices when, in an extensive form decision problem, she exhibits a particular type of imperfect recall named absentmindedness. Such imperfection obtains whenever an information set includes histories along the same decision path. Starting from work focusing on the Absentminded Driver example, and independently developed by Segal (2000) and Dimitri (1999), the main theorem of this paper provides a general result of dynamically consistent choices, valid for a large class of finite extensive form decision problems without nature.
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- Gilboa, Itzhak, 1997.
"A Comment on the Absent-Minded Driver Paradox,"
Games and Economic Behavior,
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- 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.
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- Battigalli, Pierpaolo, 1997. "Dynamic Consistency and Imperfect Recall," Games and Economic Behavior, Elsevier, vol. 20(1), pages 31-50, July.
- Sáez-Martí, María & Weibull, Jörgen W., 2002. "Discounting and Future Selves," Working Paper Series 575, Research Institute of Industrial Economics.
- Hvide, H.K., 1999. "Bounds to Memory Loss," Papers 11-99, Tel Aviv.
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