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) 
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 ().