Abstract
In a dynamic context a decision maker at any instant t has information about his exogenous economic environment both at time t and at later dates. We represent the environment at t by a vector x(t) of exogenous variables, and their future values by \( \left(x\left(t+1\right),x\left(t+2\right),\dots, x\left(t+T\right)\right) \). The horizon T is determined by such considerations as length of life, technology, resource limitations etc.; it might be infinite. A decision rule at time t is a map ψt associating with a vector of variables z the variable d representing the choice of the decision maker. We write \( d={\psi}_t(z) \). Myopic decision rules refer to those maps of the form \( d(t)={\psi}_t\left(x(t)\right) \) in which d(t) depends only upon the values of the exogenous variables at time t, disregarding any information about future conditions of the economic environment. A decision rule is said to be non-myopic if it is of the form \( d(t)={\psi}_t\left(x(t),x\left(t=1\right),\dots, x\left(t+T\right)\right) \).
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Barro, R.J. 1974. Are government bonds net wealth? Journal of Political Economy 82(6): 1095–1117.
Blackorby, C., D. Nissen, D. Primont, and R.R. Russell. 1973. Consistent intertemporal decision making. Review of Economic Studies 40: 239–248.
Von Böhm-Bawerk, E. 1889. The positive theory of capital. Trans. William Smart. London: Macmillan, 1891.
Domar, E.D. 1946. Capital expansion, rate of growth, and employment. Econometrica 14: 137–147.
Fisher, I. 1930. The theory of interest. New York: Macmillan.
Friedman, M. 1957. A theory of the consumption function. Princeton: Princeton University Press.
Hammond, P.J. 1976. Changing tastes and coherent dynamic choice. Review of Economic Studies 43: 159–173.
Harris, C. 1985. Existence and characterization of perfect equilibrium in games of perfect information. Econometrica 53: 613–628.
Harrod, R.F. 1939. An essay in dynamic theory. Economic Journal 49: 14–33.
Keynes, J. 1936. The general theory of employment, interest and money. London: Macmillan.
Modigliani, F., and R. Brumberg. 1954. Utility analysis and the consumption function: an interpretation of cross-section data. In Post-Keynesian economics, ed. K. Kurihara. New Brunswick: Rutgers University Press.
Phelps, E.S., and R.A. Pollak. 1968. On second-best national saving and game-equilibrium growth. Review of Economic Studies 35: 185–199.
Pollak, R. 1968. Consistent planning. Review of Economic Studies 35: 201–208.
Ramsey, F.P. 1928. A mathematical theory of saving. Economic Journal 38: 543–559.
Selten, R. 1975. Reexamination of the perfectness concept of equilibrium points in extensive games. International Journal of Game Theory 4: 25–55.
Solow, R.M. 1956. A contribution to the theory of economic growth. Quarterly Journal of Economics 70: 65–94.
Strotz, R. 1956. Myopia and inconsistency in dynamic utility maximization. Review of Economic Studies 23: 165–180.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Kurz, M. (2018). Myopic Decision Rules. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1261
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_1261
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences