Prior Knowledge and Monotone Decision Problems

12 Pages Posted: 13 Jul 2018 Last revised: 28 Nov 2018

See all articles by Bernard Sinclair-Desgagne

Bernard Sinclair-Desgagne

SKEMA Business School - Sophia Antipolis Campus

Date Written: November 24, 2018

Abstract

This paper identifies cognitive conditions under which a rational individual or group decision-maker will want to commit ex ante to some choice restrictions, in order to get extra information about an uncertain state of nature. We show that the implemented limitations will then bring her to solve a monotone decision problem. This provides a behavioral/microeconomic foundation for the recurrence of this type of problem in many contexts. From another angle, the analysis explains why and when individuals and organizations resort to automatic responses or routines in some circumstances, and how this can shape their environment.

Keywords: Choice architecture; Attention and effort; Design attributes; Routines

JEL Classification: D01, D21, D80, D83

Suggested Citation

Sinclair-Desgagne, Bernard, Prior Knowledge and Monotone Decision Problems (November 24, 2018). Available at SSRN: https://ssrn.com/abstract=3204669 or http://dx.doi.org/10.2139/ssrn.3204669

Bernard Sinclair-Desgagne (Contact Author)

SKEMA Business School - Sophia Antipolis Campus ( email )

60 rue Dostoïevski
Sophia Antipolis, 06902
France

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