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

Johannes Binswanger ()

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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: portfolio choice; Feasibility goals; planning; bounded/procedural rationality; life cycle saving; portfolio choice. (search for similar items in EconPapers)
Date: 2011-05-12
Note: View the original document on HAL open archive server: https://hal.science/hal-00989522
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Citations: View citations in EconPapers (4)

Published in Journal of Economic Behavior and Organization, 2011, 78 (3), pp.219. ⟨10.1016/j.jebo.2011.01.006⟩

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Journal Article: Dynamic decision making with feasibility goals: A procedural-rationality approach (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00989522

DOI: 10.1016/j.jebo.2011.01.006

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