Dynamic Consistency in Extensive Form Decision Problems

• Autores: Nicola Dimitri
• Localización: Abstracts of the Fifth Spanish Meeting on Game Theory and Applications / coord. por Jesús Mario Bilbao Arrese, Francisco Ramón Fernández García, 2002, ISBN 84-472-0733-1, pág. 61
• Idioma: inglés
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• Resumen

  • In a stimulating paper Piccione and Rubinstein (1997) argued how a decision maker could undertake dynamically inconsistent choices, when in an extensive form decision problem she exhibits a particular type of imperfect recall named �absentmindedness�. Such imperfection obtains whenever an information set includes histories along the same decision path. Starting from work focusing on the Absentminded Driver example, and independently developed by Segal (2000) and Dimitri (1999), the main theorem of this paper provides a general result of dynamically consistent choices, valid for the entire class of finite extensive form decision problems (with any kind of imperfect information) without nature. The result obtains under two main behavioral assumptions, that fully take into account the decision maker�s awareness of her possibly being absentminded. The first assumption says that upon reaching an information set, beliefs to be at a certain decision node should be consistent with the behavioral strategy chosen at that set, and not with the one adopted prior to reaching the set itself. The second assumption fully incorporates into the decision maker�s reasoning the idea that, for the decision maker herself, the game has the same value at all nodes within an information set, most notably those where absentmindedness is exhibited. The paper Dimitri (1999), only on the absentimindeddriver, was presented at the Bologna 1999, Meeting organised by the Italian Game Theory Association.