Bounded memory in a changing world: Biases in behaviour and belief

• 成果类型: Article
• 署名作者: Chatterjee, Kalyan; Guryev, Konstantin; Hu, Tai-Wei
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University of Bristol
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2022.105556
• 发表日期: 2022
• 关键词: Constrained inference; Changing worlds; Availability heuristic; regime change

摘要

A decision-maker faces a decision problem to choose an action, at a randomly determined time, to match an unknown state of nature. She has access to a sequence of signals partially informative of the current state of nature. The state of nature evolves according to a Markov chain. The decision-maker is subject to constraints on information-processing capacity, modelled here by a finite set of memory states. We char-acterize when optimal inference is possible with these constraints and, when it is not, what the optimal constrained inference is in two broad classes of environments. In the first class where the signals have sim-ilar strengths, optimal inference can be represented by simple rules corresponding to heuristics, like the recency bias, which have been studied by experimental researchers. In the second class where one signal is very informative, the constrained optimal rule ignores the possibility of regime changes.(c) 2022 Elsevier Inc. All rights reserved.