Dynamic decision making with feasibility goals: A procedural-rationality approach

Johannes Binswanger ()

Journal of Economic Behavior & Organization, 2011, vol. 78, issue 3, 219-228

Abstract: Abstract This paper proposes a new framework of intertemporal choice: decision making by means of so-called feasibility goals. These refer to the feasibility of certain target levels of consumption associated with specific future benchmark scenarios. The feasibility goals framework takes into account bounded/procedural rationality without stepping outside the realm of an optimization framework. The paper has two aims. First, it provides a general characterization of the feasibility goals framework. Second, it provides a simple life cycle model with feasibility goals to illustrate the applicability of the concept. The life cycle model is promising for better understanding individual portfolio choice.

Keywords: Feasibility; goals; Planning; Bounded/procedural; rationality; Life; cycle; saving; Portfolio; choice (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:78:y:2011:i:3:p:219-228

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