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Simple and inertial behavior: an optimizing decision model with imprecise perceptions

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Summary

Simplicity and inertial (or status-quo) bias are common features of actual decision rules used by real-life agents. In this paper, we provide one possible rationale for these features in terms of a model in which the decision maker is subject to imprecise perceptions about the consequences of actions that differ from (an already experienced) status quo.

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Authors and Affiliations

  1. Facultad de Económicas and Instituto Valenciano de Investigaciones Económicas, Universidad de Alicante, Campus Vicente, E-03071, Alicante, Spain

    Fernando Vega-Redondo

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  1. Fernando Vega-Redondo
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I am grateful to participants in seminars at Harvard University, University of Virginia, Virginia Polytechnic Institute, and Universitat Autonoma de Barcelona for helpful comments. Finantial support by the CICYT, project no. PB86-0613, and the Institute for Advanced Studies of the Hebrew University of Jerusalem in gratefully acknowledged.

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Vega-Redondo, F. Simple and inertial behavior: an optimizing decision model with imprecise perceptions. Econ Theory 3, 87–98 (1993). https://doi.org/10.1007/BF01213693

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  • DOI: https://doi.org/10.1007/BF01213693

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