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Theoretical Economics
Article . 2019 . Peer-reviewed
Data sources: Crossref
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Theoretical Economics
Article
License: CC BY NC
Data sources: UnpayWall
EconStor
Article . 2019
License: CC BY NC
Data sources: EconStor
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Boundedly rational backward induction

Authors: Ke, Shaowei;

Boundedly rational backward induction

Abstract

This paper proposes simple axioms that characterize a generalization of backward induction. At any node of a decision tree, the decision maker looks forward a fixed number of stages perfectly. Beyond that, the decision maker aggregates continuation values according to a function that captures reasoning under unpredictability. The model is uniquely identified from the decision maker's preference over decision trees. Confronting a decision tree, the decision maker iteratively revises her plan for the future as she moves forward in the decision tree. A comparative measure of unpredictability aversion and several examples are discussed.

Country
United States
Related Organizations
Keywords

imperfect foresight, Economics, ddc:330, time inconsistency, Social Sciences, Dynamic choice, D00

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
10
Top 10%
Average
Top 10%
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