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Convergence in a sequential two stage decision making process

Author

Listed:
  • Juan-Enrique Martínez-Legaz

    (UAB - Universitat Autònoma de Barcelona = Autonomous University of Barcelona = Universidad Autónoma de Barcelona)

  • Antoine Soubeyran

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

We analyze a sequential decision making process, in which at each step the decision is made in two stages. In the first stage a partially optimal action is chosen, which allows the decision maker to learn how to improve it under the new environment. We show how inertia (cost of changing) may lead the process to converge to a routine where no further changes are made. We illustrate our scheme with some economic models.

Suggested Citation

  • Juan-Enrique Martínez-Legaz & Antoine Soubeyran, 2016. "Convergence in a sequential two stage decision making process," Post-Print hal-01690175, HAL.
  • Handle: RePEc:hal:journl:hal-01690175
    Note: View the original document on HAL open archive server: https://amu.hal.science/hal-01690175
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    File URL: https://amu.hal.science/hal-01690175/document
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    Cited by:

    1. Antoine Soubeyran, 2022. "Variational rationality. Self regulation success as a succession of worthwhile moves that make sufficient progress," Working Papers hal-04041238, HAL.
    2. Antoine Soubeyran, 2023. "Variational rationality. Self regulation success as a succession of worthwhile moves that make sufficient progress," AMSE Working Papers 2307, Aix-Marseille School of Economics, France.

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