BOUNDED MEMORY AND BIASES IN INFORMATION PROCESSING

• 成果类型: Article
• 署名作者: Wilson, Andrea
• 署名单位: University of Wisconsin System; University of Wisconsin Madison
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA12188
• 发表日期: 2014
• 页码: 2257-2294
• 关键词: DECISION-PROBLEMS; games

摘要

Before choosing among two actions with state-dependent payoffs, a Bayesian decision-maker with a finite memory sees a sequence of informative signals, ending each period with fixed chance. He summarizes information observed with a finite-state automaton. I characterize the optimal protocol as an equilibrium of a dynamic game of imperfect recall; a new player runs each memory state each period. Players act as if maximizing expected payoffs in a common finite action decision problem. I characterize equilibrium play with many multinomial signals. The optimal protocol rationalizes many behavioral phenomena, like stickiness, salience, confirmation bias, and belief polarization.