On Deciding When to Decide

21 Pages Posted: 15 May 2018

See all articles by Itzhak Gilboa

Itzhak Gilboa

Tel Aviv University - Eitan Berglas School of Economics; HEC Paris - Economics & Decision Sciences

Fan Wang

HEC Paris

Date Written: May 1, 2017

Abstract

We consider a decision maker who follows a status quo without reconsidering her implicit decision at every period. Only as a result of certain events will she ask herself whether she would like to change her choice. We ask when this mode of decision making is compatible with optimality. We state conditions on the set of databases that would make the decision maker take an explicit decision, which are equivalent to the following representation: the decision maker entertains a set of theories, of which one is that her current choice is the best; she is inert as long as that theory beats any alternative theory according to a maximum likelihood criterion.

Suggested Citation

Gilboa, Itzhak and Wang, Fan, On Deciding When to Decide (May 1, 2017). HEC Paris Research Paper No. ECO/SCD-2018-1270. Available at SSRN: https://ssrn.com/abstract=3178757 or http://dx.doi.org/10.2139/ssrn.3178757

Itzhak Gilboa (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
972-3-640-6423 (Phone)
972-3-640-9908 (Fax)

HEC Paris - Economics & Decision Sciences

Paris
France

Fan Wang

HEC Paris ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

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