This paper advances the claim that ignoring relevant information is sometimes consistent with good decision making. Although that finding is not new, the argument presented here is. In contrast with bounded rationality models, the decision-making model in this paper presupposes no cognitive...

An important problem in descriptive and prescriptive research in decision making is to identify "regions of rationality," i.e., the areas for which simple, heuristic models are and are not effective. To map the contours of such regions, we derive probabilities that models identify the best of m...

Is it better to apply effort to increase personal consumption, or control what one wants? The model presented here provides a characterization of demand for self control, namely, its responsiveness to price and risk. Unlike most other models of self control, the model does not identify self...

The effectiveness of decision rules depends on characteristics of both rules and environments. A theoretical analysis of environments specifies the relative predictive accuracies of the “take-the-bestâ€\x9D heuristic (TTB) and other simple strategies for choices between two outcomes...

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Almost by definition decision-making is typical human activity, and therefore important psychological subject. The starting point of its classical conception within psychology could be traced back to economy and mathematic, with ideas of human as rational economic being, and conceptualising...

A utility maximizing model of allocating limited attention between adopting new behaviors and adapting current behaviors generates an optimal policy that resembles commonly observed, and apparently irrational, behavioral rules. The ability to update current behaviors implies an endogenous...

The possibility of building a mathematical theory of a system or of simulating that system does not depend on having an adequate microtheory of the natural laws that govern the system components. Such a microtheory might indeed be simply irrelevant. Herbert A. Simon, The Sciences of the...

Given the difficulties people experience in making trade-offs, what are the consequences of using simple models that avoid trade-offs? We examine choices by such models in environments where "true" preferences are linear and attributes are characterized by binary attributes. A deterministic...