Planning with multiple biases

Jon Kleinberg, Sigal Oren, Manish Raghavan

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

9 Scopus citations

Abstract

Recent work has considered theoretical models for the behavior of agents with specific behavioral biases: Rather than making decisions that optimize a given payoff function, the agent behaves inefficiently because its decisions su.er from an underlying bias. These approaches have generally considered an agent who experiences a single behavioral bias, studying the e.ect of this bias on the outcome. In general, however, decision-making can and will be affected by multiple biases operating at the same time. How do multiple biases interact to produce the overall outcome? Here we consider decisions in the presence of a pair of biases exhibiting an intuitively natural interaction: present bias -The tendency to value costs incurred in the present too highly -And sunk-cost bias -The tendency to incorporate costs experienced in the past into one's plans for the future. We propose a theoretical model for planning with this pair of biases, and we show how certain natural behavioral phenomena can arise in our model only when agents exhibit both biases. As part of our model we differentiate between agents that are aware of their biases (sophisticated) and agents that are unaware of them (naive). Interestingly, we show that the interaction between the two biases is quite complex: in some cases, they mitigate each other's effects while in other cases they might amplify each other. We obtain a number of further results as well, including the fact that the planning problem in our model for an agent experiencing and aware of both biases is computationally hard in general, though tractable under more relaxed assumptions.

Original languageEnglish
Title of host publicationEC 2017 - Proceedings of the 2017 ACM Conference on Economics and Computation
PublisherAssociation for Computing Machinery, Inc
Pages567-584
Number of pages18
ISBN (Electronic)9781450345279
DOIs
StatePublished - 20 Jun 2017
Event18th ACM Conference on Economics and Computation, EC 2017 - Cambridge, United States
Duration: 26 Jun 201730 Jun 2017

Conference

Conference18th ACM Conference on Economics and Computation, EC 2017
Country/TerritoryUnited States
CityCambridge
Period26/06/1730/06/17

Fingerprint

Dive into the research topics of 'Planning with multiple biases'. Together they form a unique fingerprint.

Cite this