A COMPARISON OF INFORMATION STRUCTURES FOR A RIGID DECISION RULE CASE

Niv Ahituv*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

The information economics model of individual decision assumes that decision makers are capable of instantly modifying their decision rules in response to signal changes from the information structure. Individuals, however, often tend to stick to rigid decision rules, particularly when they are trained to respond with conditioned reactions, such as to a traffic light. This article modifies the individual decision model for such cases. It discusses probabilistic information structures as well as the deterministic information function. It results in an ordering of information structures that differs from the ordering imposed by the Blackwell Theorem. When deterministic information functions are considered, an ordering that is finer than the prevailing one is proposed. Transformations between deterministic and probabilistic information functions and the relationship between the proposed model and the previous theory are also discussed.

Original languageEnglish
Pages (from-to)399-416
Number of pages18
JournalDecision Sciences
Volume12
Issue number3
DOIs
StatePublished - Jul 1981
Externally publishedYes

Keywords

  • Decision Processes
  • Information Economics
  • Statistical Decision Theory.

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