[DT-Forum] Rational Status Quo

[Fan WANG]

Dear Colleagues,

Tzachi and I revised our paper, "Deciding When to Decide".  The revision was quite extensive, and while the theorems are only a little bit nicer than the older ones, the interpretation is rather different.  The paper is now titled "Rational Status Quo", and its introduction and discussion are different from the older one.  It's available HERE and the abstract is attached at the end of this message. 

Thanks for any comments!

Abstract: Decision makers often stick to a status quo without explicitly re- considering it at every period. Yet, their observed choices might be compatible with a fully rational model. We ask when such a ratio- nalization is possible. We assume as observable only the choice of sticking to the status quo vs. changing it, as a function of a data- base of cases. We state conditions on the set of databases that would make the decision maker change the status quo, which are equivalent to the following representation: the decision maker entertains a set of theories, of which one is that her current choice is the best; she is inert as long as that theory beats any alternative theory according to a maximum likelihood criterion.

Best,

Fan