Memory and Anticipation

Bibliographic Data

ID9719374
AuthorsB Douglas Bernheim (0000-0002-6483-7622, Stanford University and NBER), Raphael Thomadsen (0000-0003-3958-5416, Columbia University)
Year2005
Volume115
Issue503
Pages271-304
Publication date2005-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2005.00989.x
OpenAlexW3125084272
LanguageEN
Citations received7
References cited32

The introduction of memory imperfections into models of economic decision making creates a natural role for anticipatory emotions. Their combination has striking behavioural implications. The paper first shows that agents can rationally select apparently dominated strategies. We consider Newcomb's Paradox and the Prisoners' Dilemma. We provide a resolution for Newcomb's Paradox and argue it requires the decision maker to ascribe only a tiny weight to anticipatory emotions. For some ranges of parameters, it is possible to obtain cooperation in the Prisoners' Dilemma with probability arbitrarily close to unity. The second half of the paper provides a theory of reminders. Copyright 2005 Royal Economic Society

Anticipation (artificial intelligence · Columbia university · Media studies · Sociology · Artificial Intelligence · Auction Theory and Applications · Computer Science · Economic theories and models · Game Theory and Applications · Psychology