ISSN:
1573-059X
Keywords:
decision making
;
dynamic programming
;
sequential choice
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract This paper reviews recent research on normative and descriptive models of sequential choice. In particular, the basic results of dynamic decision theory, including Bellman's principle of optimality, are briefly described. We then consider the descriptive validity of three assumptions that are frequently made in applications of dynamic programming models: forward planning, optimal learning, and stationarity. We offer the preliminary conclusion that although the outcomes of human decision policies may often be nearly optimal, most evidence suggests that the decision processes themselves are likely to be rather different from those that are consistent with normative theory. Finally, we suggest four fundamental elements for a positive theory of dynamic decision making.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF00999211
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