The necessity of imperfect decisions |
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| Affiliation: | 1. Oita University, 700 Dannoharu, Oita, Japan;2. Doshisha University, Karasuma-higashi-iru, Imadegawa-dori, Kamigyo-ku, Kyoto 6028580, Japan;3. Schar School of Policy and Government, George Mason University, 3351 Fairfax Drive, MS 3B1, Arlington, VA, 22201 USA;1. The Engineering Research Institute, Ulster University, Newtownabbey BT37 OQB, United Kingdom;2. School of Chemistry and Chemical Engineering, Queen''s University Belfast, Stranmillis Road, Belfast BT9 5AG, United Kingdom;3. Instituto de Tecnología Química UPV-CSIC, Universidad Politécnica de Valencia, Av. de los Naranjos s/n, 46022 Valencia, Spain;1. Independent Researcher/Visiting Research Fellow, School of Hospitality and Tourism Management, Faculty of Arts and Social Sciences, University of Surrey, Guildford GU2 7XH, United Kingdom;2. School of Law, Middlesex University, The Burroughs, Hendon, London NW4 4BT, United Kingdom;1. Keep Northern Ireland Beautiful, Bridge House, 2 Paulett Avenue, Belfast BT5 4HD, United Kingdom;2. University of Surrey, Guildford GU2 7XH, United Kingdom |
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| Abstract: | I construct a general model which neither postulates decisions are always optimal, nor that decision errors necessarily arise when ‘real world’ agents are involved. Nevertheless, I show that agents always have a positive marginal incentive to use some information imperfectly, but never to use all potential information even if they have costless access to perfect information about how to select every action. These results imply that in order for a decision problem to be internally consistent without simply postulating the extreme limit of perfect decisions, it must explicitly incorporate the effects of both information and decision errors on behavior. |
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