EconPapers    
Economics at your fingertips  
 

The value of (bounded) memory in a changing world

Daniel Monte () and Maher Said

Economic Theory, 2014, vol. 56, issue 1, 59-82

Abstract: This paper explores the value of memory in decision making in dynamic environments. We examine the decision problem faced by an agent with bounded memory who receives a sequence of signals from a partially observable Markov decision process. We characterize environments in which the optimal memory consists of only two states. In addition, we show that the marginal value of additional memory states need not be positive and may even be negative in the absence of free disposal. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Bounded memory; Dynamic decision making; Partially observable Markov decision process; C61; D81; D83 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00199-013-0771-1 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Learning in hidden Markov models with bounded memory (2010) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:56:y:2014:i:1:p:59-82

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-013-0771-1

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-30
Handle: RePEc:spr:joecth:v:56:y:2014:i:1:p:59-82