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An optimal sequential information acquisition model subject to a heuristic assimilation constraint.
- Source :
- Benchmarking: An International Journal; 2016, Vol. 23 Issue 4, p937-982, 46p
- Publication Year :
- 2016
-
Abstract
- Purpose – The purpose of this paper is to study the optimal sequential information acquisition process of a rational decision maker (DM) when allowed to acquire n pieces of information from a set of bi-dimensional products whose characteristics vary in a continuum set. Design/methodology/approach – The authors incorporate a heuristic mechanism that makes the n-observation scenario faced by a DM tractable. This heuristic allows the DM to assimilate substantial amounts of information and define an acquisition strategy within a coherent analytical framework. Numerical simulations are introduced to illustrate the main results obtained. Findings – The information acquisition behavior modeled in this paper corresponds to that of a perfectly rational DM, i.e. endowed with complete and transitive preferences, whose objective is to choose optimally among the products available subject to a heuristic assimilation constraint. The current paper opens the way for additional research on heuristic information acquisition and choice processes when considered from a satisficing perspective that accounts for cognitive limits in the information processing capacities of DMs. Originality/value – The proposed information acquisition algorithm does not allow for the use of standard dynamic programming techniques. That is, after each observation is gathered, a rational DM must modify his information acquisition strategy and recalculate his or her expected payoffs in terms of the observations already acquired and the information still to be gathered. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 14635771
- Volume :
- 23
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- Benchmarking: An International Journal
- Publication Type :
- Academic Journal
- Accession number :
- 115111081
- Full Text :
- https://doi.org/10.1108/BIJ-01-2014-0008