Cahier 2018-15

Title:The Preference for Monotone Decision Problems
Abstract:This paper spells out conditions under which a rational decisionmaker will commit ex ante to certain choice restrictions, in order to get extra information about an uncertain state of nature. We show that the envisioned limitations will then bring the decision-maker to solve a monotone decision problem. This provides a first rationale for the observed recurrence of this type of problem in economic life. From another angle, the analysis also explains why individuals and organizations resort to automatic responses and routines in some circumstances, and how this contributes to shape their environment.
Keyword(s):Monotone decision problems; Rational inattention; Design attributes; Routines
Auteur(s) :Bernard Sinclair-Desgagné
JEL Class.:D01, D02, D89

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