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Rationally Biased Learning

Authors
  • De Lara, Michel
Publication Date
Sep 05, 2017
Source
HAL-UPMC
Keywords
Language
English
License
Unknown
External links

Abstract

Are human perception and decision biases grounded in a form of rationality? You return to your camp after hunting or gathering. You see the grass moving. You do not know the probability that a snake is in the grass. Should you cross the grass — at the risk of being bitten by a snake — or make a long, hence costly, detour? Based on this storyline, we consider a rational decision maker maximizing expected discounted utility with learning. We show that his optimal behavior displays three biases: status quo, salience, overestimation of small probabilities. Biases can be the product of rational behavior.

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