IDEAS home Printed from https://ideas.repec.org/a/ids/gbusec/v7y2005i1p59-73.html
   My bibliography  Save this article

Decision-making environments in which unboundedly rational decision makers choose to ignore relevant information

Author

Listed:
  • Nathan Berg

Abstract

This paper advances the claim that ignoring relevant information is sometimes consistent with good decision making. Although that finding is not new, the argument presented here is. In contrast with bounded rationality models, the decision-making model in this paper presupposes no cognitive constraints or costs associated with processing available information. The paper identifies a class of decision-making environments characterised by asymmetric payoffs and probabilities – a property which gives rise to optimal decision rules that ignore relevant information. In other words, optimal decision procedures used by omniscient agents are sometimes independent of variables that objectively predict future outcomes.

Suggested Citation

  • Nathan Berg, 2005. "Decision-making environments in which unboundedly rational decision makers choose to ignore relevant information," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 7(1), pages 59-73.
    • Handle: RePEc:ids:gbusec:v:7:y:2005:i:1:p:59-73
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=6920
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:clg:wpaper:2007-10 is not listed on IDEAS
    2. Berg, Nathan & Hoffrage, Ulrich, 2010. "Compressed environments: Unbounded optimizers should sometimes ignore information," MPRA Paper 26372, University Library of Munich, Germany.
    3. Oxoby, Robert J., 2007. "The Effect of Incentive Structure on Heuristic Decision Making: The Proportion Heuristic," IZA Discussion Papers 2857, Institute of Labor Economics (IZA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:gbusec:v:7:y:2005:i:1:p:59-73. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=168 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.