Thinking Ahead: The Decision Problem
We propose a model of costly decision making based on time-costs of deliberating current and future decisions. We model an individual decision-maker's thinking process as a thought-experiment that takes time, and lets the decision maker 'think ahead' about future decision problems in yet unrealized states of nature. By formulating an intertemporal, state-contingent, planning problem which may involve costly deliberation in every state of nature, and by letting the decision maker deliberate ahead of the realization of a state, we attempt to capture the basic observation that individuals generally do not think through a complete action plan. Instead, individuals prioritize their thinking and leave deliberations on less important decisions to the time or event when they arise. Copyright 2009, Wiley-Blackwell.
Year of publication: |
2009
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Authors: | Bolton, Patrick ; Faure-Grimaud, Antoine |
Published in: |
Review of Economic Studies. - Oxford University Press. - Vol. 76.2009, 4, p. 1205-1238
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Publisher: |
Oxford University Press |
Saved in:
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