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Consistent planning, backwards induction, and rule-governed behavior

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  • Christian Koboldt

Abstract

This paper argues that with regard to sequential choice problems the set of assumptions that are necessary for the process of planning to be logically consistent may make the notion of rational dynamic consistency an unacceptable prescription for choice. In this sense, motivational limits to rationality may arise, adding to the inability of making consistent plans an unwillingness to engage in planning consistently. A different notion of planning, centered around the notion of self-commitment and rule-governed behavior may appear to be a more natural solution to optimal sequential choice. Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Christian Koboldt, 1996. "Consistent planning, backwards induction, and rule-governed behavior," Constitutional Political Economy, Springer, vol. 7(1), pages 35-48, March.
    • Handle: RePEc:kap:copoec:v:7:y:1996:i:1:p:35-48
    DOI: 10.1007/BF00143478
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    References listed on IDEAS

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    1. R. A. Pollak, 1968. "Consistent Planning," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(2), pages 201-208.
    2. McClennen,Edward F., 1990. "Rationality and Dynamic Choice," Cambridge Books, Cambridge University Press, number 9780521360470, January.
    3. Bezalel Peleg & Menahem E. Yaari, 1973. "On the Existence of a Consistent Course of Action when Tastes are Changing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(3), pages 391-401.
    4. Sugden, Robert, 1991. "Rational Choice: A Survey of Contributions from Economics and Philosophy," Economic Journal, Royal Economic Society, vol. 101(407), pages 751-785, July.
    5. Steven M. Goldman, 1980. "Consistent Plans," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(3), pages 533-537.
    6. Frank, Robert H, 1987. "If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience?," American Economic Review, American Economic Association, vol. 77(4), pages 593-604, September.
    7. Kreps, David M., 1990. "Game Theory and Economic Modelling," OUP Catalogue, Oxford University Press, number 9780198283812.
    8. Karni, Edi & Schmeidler, David, 1991. "Atemporal dynamic consistency and expected utility theory," Journal of Economic Theory, Elsevier, vol. 54(2), pages 401-408, August.
    9. Geoffrey Brennan & Hartmut Kliemt, 1990. "Logo logic," Constitutional Political Economy, Springer, vol. 1(1), pages 125-127, December.
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    More about this item

    Keywords

    A12; D10; D90;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • D10 - Microeconomics - - Household Behavior - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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