Many decisions involve multiple stages of choices and events, and these decisions can be represented graphically as decision trees. Optimal decision strategies for decision trees are commonly determined by a backward induction analysis that demands adherence to three fundamental consistency principles: dynamic, consequential, and strategic. Previous research found that decision-makers tend to exhibit violations of dynamic and strategic consistency at rates significantly higher than choice inconsistency across various levels of potential reward. The current research extends these findings under new conditions; (...) specifically, it explores the extent to which these principles are violated as a function of the planning horizon length of the decision tree. Results from two experiments suggest that dynamic inconsistency increases as tree length increases; these results are explained within a dynamic approach–avoidance framework. (shrink)

The aim of the paper is to propose a preferences representation model under risk where risk perception can be past experience dependent. A first step consists in considering a one period decision problem where individual preferences are no more defined only on decisions but on pairs (decision, past experience). The obtained criterion is used in the construction of a dynamic choice model under risk. The paper ends with an illustrative example concerning insurance demand. It appears that our model allows to (...) explain modifications in the insurance demand behavior over time observed on the insurance markets for catastrophic risk and difficult to justify with standard models. (shrink)

What happens to our conception of mind and rational agency when we take seriously future-directed intentions and plans and their roles as inputs into further practical reasoning? The author's initial efforts in responding to this question resulted in a series of papers that he wrote during the early 1980s. In this book, Bratman develops further some of the main themes of these essays and also explores a variety of related ideas and issues. He develops a planning theory of intention. Intentions (...) are treated as elements of partial plans of action. These plans play basic roles in practical reasoning, roles that support the organization of our activities over time and socially. Bratman explores the impact of this approach on a wide range of issues, including the relation between intention and intentional action, and the distinction between intended and expected effects of what one intends. (shrink)

Decision theory is a theory of rationality, but the concept of rationality has several different dimensions. Making decision theory more realistic with respect to one dimension may well have the result of making it less realistic in another dimension. This paper illustrates this tension in the context of sequential choice. Trying to make decision theory more realistic by accommodating resoluteness and commitment brings the normative assessment dimension of rationality into conflict with the action-guiding dimension. In the case of resolute choice (...) the conflict comes because of a clash of perspectives. The perspective from which resolute choice seems normatively compelling is not the perspective from which it can serve the purpose of guiding action. (shrink)

The authors explore the history of experiments in economics, provide examples of different types of experiments and show that the growing use of experimental methods is transforming economics into an empirical science.

This is a major contribution to the theory of rational choice which will be of particular interest to philosophers and economists. The author sets out the foundations of rational choice, and then sketches a dynamic choice framework in which principles of ordering and independence follow from a number of apparently plausible conditions. However, there is potential conflict among these conditions, and when they are weakened to avoid it the usual foundations of rational choice no longer prevail. The thrust of the (...) argument is to suggest that the theory of rational choice is less deterministic than many suppose. (shrink)