BOUNDED MEMORY AND BIASES IN INFORMATION PROCESSING
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 equ...
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| Veröffentlicht in: | Econometrica 2014-11, Vol.82 (6), p.2257-2294 |
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| container_title | Econometrica |
| container_volume | 82 |
| creator | Wilson, Andrea |
| description | 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. |
| doi_str_mv | 10.3982/ECTA12188 |
| format | Article |
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The optimal protocol rationalizes many behavioral phenomena, like "stickiness," salience, confirmation bias, and belief polarization.</description><subject>absent‐minded</subject><subject>Bayesian analysis</subject><subject>Bias</subject><subject>biases</subject><subject>bounded memory</subject><subject>bounded rationality</subject><subject>Decision making</subject><subject>Dynamic games</subject><subject>Econometrics</subject><subject>Economic analysis</subject><subject>Economic equilibrium</subject><subject>Economic theory</subject><subject>Game theory</subject><subject>Herding</subject><subject>Imperfect recall</subject><subject>Information processing</subject><subject>Learning</subject><subject>Markov processes</subject><subject>Memory</subject><subject>multiselves</subject><subject>Observational learning</subject><subject>Outcomes of education</subject><subject>Probabilities</subject><subject>Randomness</subject><subject>Studies</subject><issn>0012-9682</issn><issn>1468-0262</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2014</creationdate><recordtype>article</recordtype><recordid>eNp10E1rwkAQBuCltFBre-gPKAR6aQ-pO_uV3WOM0QY0KUYPPYUkbkCJxmaV4r_vSoqHQmHY2cPzDsMg9Aj4jSpJBmGw8IGAlFeoB0xIFxNBrlEPYyCuEpLcojtjNhhjbquH6DBZxqNw5MzCWTL_dPx45AwjPw1TJ4ptjZP5zF9ESex8zJMgTNMontyjmyqvjX747X20HIeL4N2dJpMo8KduybhgboEVy1f2KbiHNWivKDkHjwIVFIMWUvFCrjgUoLGimAPh3qqqtNScKwJA--ilm7tvm6-jNodsuzalrut8p5ujyUAwIZTAXFj6_IdummO7s9udFfYolUJa9dqpsm2MaXWV7dv1Nm9PGeDsfL7scj5rB539Xtf69D_sfkwwm3jqEhtzaNpLglEBQgGlP_2acUI</recordid><startdate>201411</startdate><enddate>201411</enddate><creator>Wilson, Andrea</creator><general>Econometric Society</general><general>Blackwell Publishing Ltd</general><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>201411</creationdate><title>BOUNDED MEMORY AND BIASES IN INFORMATION PROCESSING</title><author>Wilson, Andrea</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c4564-b094ad094b570e1e7bc55173136301e6895b8d51b1e093051257dffe8e5592113</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2014</creationdate><topic>absent‐minded</topic><topic>Bayesian analysis</topic><topic>Bias</topic><topic>biases</topic><topic>bounded memory</topic><topic>bounded rationality</topic><topic>Decision making</topic><topic>Dynamic games</topic><topic>Econometrics</topic><topic>Economic analysis</topic><topic>Economic equilibrium</topic><topic>Economic theory</topic><topic>Game theory</topic><topic>Herding</topic><topic>Imperfect recall</topic><topic>Information processing</topic><topic>Learning</topic><topic>Markov processes</topic><topic>Memory</topic><topic>multiselves</topic><topic>Observational learning</topic><topic>Outcomes of education</topic><topic>Probabilities</topic><topic>Randomness</topic><topic>Studies</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Wilson, Andrea</creatorcontrib><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Econometrica</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Wilson, Andrea</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>BOUNDED MEMORY AND BIASES IN INFORMATION PROCESSING</atitle><jtitle>Econometrica</jtitle><date>2014-11</date><risdate>2014</risdate><volume>82</volume><issue>6</issue><spage>2257</spage><epage>2294</epage><pages>2257-2294</pages><issn>0012-9682</issn><eissn>1468-0262</eissn><coden>ECMTA7</coden><abstract>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. 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| ispartof | Econometrica, 2014-11, Vol.82 (6), p.2257-2294 |
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| language | eng |
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| source | JSTOR Mathematics & Statistics; Access via Wiley Online Library; JSTOR Archive Collection A-Z Listing |
| subjects | absent‐minded Bayesian analysis Bias biases bounded memory bounded rationality Decision making Dynamic games Econometrics Economic analysis Economic equilibrium Economic theory Game theory Herding Imperfect recall Information processing Learning Markov processes Memory multiselves Observational learning Outcomes of education Probabilities Randomness Studies |
| title | BOUNDED MEMORY AND BIASES IN INFORMATION PROCESSING |
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