Thinking ahead : the decision problem
- Thinking ahead : the decision problem
- Bolton, Patrick
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- September 2008.
- 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 let 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.
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- Suggested Citation:
- Patrick Bolton, Antoine Faure-Grimaud, 2008, Thinking ahead : the decision problem, Columbia University Academic Commons, https://doi.org/10.7916/D8B56R8T.