The Preference for Monotone Decision Problems

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2018-15

Auteur(s):

This paper spells out conditions under which a rational decisionmaker will commit ex ante to certain choice restrictions, in order to get extra information about an uncertain state of nature. We show that the envisioned limitations will then bring the decision-maker to solve a monotone decision problem. This provides a first rationale for the observed recurrence of this type of problem in economic life. From another angle, the analysis also explains why individuals and organizations resort to automatic responses and routines in some circumstances, and how this contributes to shape their environment.

JEL Class  

D01, D02, D89

Mots-clés  

Monotone decision problems; Rational inattention; Design attributes; Routines