We argue that in extensive decision problems (extensive games with a single player) withimperfectrecall care must be taken in interpreting information sets and strategies. Alternative interpretations allow for different kinds of analysis. We address the following issues: 1. randomization at information sets; 2. consistent beliefs; 3. time consistency of optimal plans; 4. the multiselves approach to decision making. We illustrate our discussion through an example that we call the "paradox of the absentminded driver."Journal of Economic LiteratureClassification Numbers: C7, D0.
ASJC Scopus subject areas
- Economics and Econometrics