Emergence of a dominant course of action in a general feedback loop when goal uncertainty is present

Richard A. Alò, André de Korvin and Robert Kleyle

Journal of the American Society for Information Science, 1987, vol. 38, issue 2, 111-117

Abstract: A decision maker is confronted with a finite set of possible courses of action, each of which can generate one of several possible outcomes. The decision maker must make a (possibly infinite) sequence of such decisions, the consequence of each decision being fed back to him so that the estimated averages can be updated before the next course of action is selected. Furthermore, suppose that initially the decision maker is uncertain of precisely how to assess the utilities associated with each action‐outcome pair (goal uncertainty), but that as he proceeds through the decision‐information feedback loop he is gradually able to sharpen his perception of these utilities (goal shaping). In this article a mathematical model of a decision maker subject to goal uncertainty is given. Conditions are established which guarantee that the decision maker's ranges of expected utilities stabilize as he cycles through the decision‐feedback loop. It is also shown that a single dominant course of action will always emerge. A specific example involving a decision maker functioning in the type of environment described above provides insight as to how this procedure works in practice. © 1987 John Wiley & Sons, Inc.

Date: 1987
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https://doi.org/10.1002/(SICI)1097-4571(198703)38:23.0.CO;2-8

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jamest:v:38:y:1987:i:2:p:111-117

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