Dynamic decision making with feasibility goals

A procedural-rationality approach

J. Binswanger

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper proposes a new framework of intertemporal choice: decision making by means of so-called feasibility goals. These refer to the feasibility of certain target levels of consumption associated with specific future benchmark scenarios. The feasibility goals framework takes into account bounded/procedural rationality without stepping outside the realm of an optimization framework. The paper has two aims. First, it provides a general characterization of the feasibility goals framework. Second, it provides a simple life cycle model with feasibility goals to illustrate the applicability of the concept. The life cycle model is promising for better understanding individual portfolio choice.
Original languageEnglish
Pages (from-to)219-228
JournalJournal of Economic Behavior and Organization
Volume78
Issue number3
DOIs
Publication statusPublished - 2011

Fingerprint

Procedural rationality
Dynamic decision making
Life-cycle model
Benchmark
Intertemporal choice
Scenarios
Decision making
Portfolio choice

Keywords

  • feasibility goals
  • planning
  • bounded/procedural rationality
  • life cycle saving
  • portfolio choice

Cite this

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title = "Dynamic decision making with feasibility goals: A procedural-rationality approach",
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Dynamic decision making with feasibility goals : A procedural-rationality approach. / Binswanger, J.

In: Journal of Economic Behavior and Organization, Vol. 78, No. 3, 2011, p. 219-228.

Research output: Contribution to journalArticleScientificpeer-review

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