Saturday, April 10, 2010

Portbale Hair Salon Sinks

Choice dynamic time inconsistency and "indecent proposal"


Glad to meet you, reader, after a few weeks more erratic for this blog, explained largely by my involvement in a competition of higher education. In advance, thank you, everything went pretty well done for me and some bloggers have been very nice as you could see in some recent comments, quite incomprehensible as we do not have this Information ...
Most important for this blog is that now, I can pick up the thread of my tickets in resuming my self-imposed discipline to contribute regularly ...


DTT just repost a few days ago one of the artistic heights of Adrian Lyne, Indecent Proposal.
History, ultraconnue, is as follows: Madam, a member of a couple in love but ruined, has a proposal for a billionaire, played by the great Bob Redford, to spend a night with him through $ 1 million. The million is more than enough to save the couple's financial distress, although we California. After various dithering worthy "of love, glory and beauty", this, with the consent of her husband, finally accepted the proposal.

course, what would happen happens. Beauty is completely tourneboulée by tonight, and failed, contrary to the initial planning of its decisions, to forget the moments she spent with Bob. Some eruptions lacrimal and throwing broken crockery later, she left the poor will live with Woody and Bob, who, damned villain, he made a frantic court it must be recognized. But the ultimate end of film, the cuckolded husband finally understands how impossible situation he put his wife, he must forgive him, and his redemption complete (it even refuses a million dollars is to tell you what level of redemption it is! ), will see his ex one last time; latter, overwhelmed by so much remorse eventually graze (very decent anyway) the great Bob and leave for new adventures with his Woody became another man.

If I tell you, reader, that's the director whose masterpiece is 9 and a half weeks in the 80's, is to tell you that we are in the upper stratosphere the 7th art. However, although close to absolute zero in terms of cinematic, the film cleverly poses the choice situations that may interest damned economists and psychologists.

[ Why so much hate, ask yourself as you drive past in Fluide Glacial Edika? Well, I have a big credibility problem on this movie! Yes, I am addressing you in particular reader: if you have to choose between Woody Harrelson, poor, and Robert Redford, certainly Aging but rich, that you ultimately choose? The answer is obvious, and despite this, forcing Hollywood happy ending, the girl ended up deciding to stay Woody . It's not moquage of this world? ]

This film shows at least a very interesting question from the perspective of individual rationality. The first and most obvious is that the ability of agents to carry out plans that define today a series of shares present and future. Economists speak of dynamic choices. A dynamic choice is simply a situation where an individual chooses between several actions, then "nature" chooses "and finally (in the simplest configuration), the individual has to choose again at the end of this sequence . The problem is how agents behave in this situation. This question was asked at the time by Robert Strotz in 1956 which brought to light the potential problems of time inconsistency agents behaving "myopic" (that is to say, especially taking into account the consequences present without properly or fully anticipate the future consequences of present decisions) or "naive" (ie does not anticipate that he will have to choose again in the future and that their preferences may change). Kydland & Prescott have also inspired the idea to formalize Strotz potential problems of a government that would choose economic policies on a discretionary rather than fix them once and for all manner of regulations ("Rules Rather Than discretion," their article of 1977).

A small example to understand this, borrowed from Homer by Jon Elster philsosophe: Suppose that Odysseus came near the island of the sirens, decided to listen to their dangerous song. It is certain death for him and his companions, as mesmerized by their song, the captain and his sailors are leading the ship on the reefs surrounding the island. If Ulysses is totally "myopic" within the meaning of rationality, he does not anticipate correctly that in deciding today to pass near the island, it causes death in more or less imminent. If he has a sophisticated rationality, it should anticipate this and help himself to place himself in this predicament. To help do something that will be costly, it "ties the hands" by asking his sailors chained to the mast of the ship, they fill their ears with wax where they do not succumb to the Call of these vicious creatures.

To return to our beautiful tempted by the "siren" Robert Redford, it should anticipate that it will be impossible to forget after their night, that spell the end of their marriage and that the million dollars would be pointless. It should therefore reject the proposal because it will be costly in the end. This is exactly like the note John Hey in one of his papers (here) as in the book of Stevenson, Jekyll & Hyde, Jekyll ultimately adopting behavior "sophisticated" of killing (physiquementt speaking, since suicide ) his present self to keep his "ego" future evil appears again. But the whole point of the film lies in the behavior of "naive" or "myopia" for not anticipating it adopts The ultimate consequences of his choice including the possibility that her future preferences be modified through the night with Bob and, ultimately, they differ from these preferences.

Ditto for the husband, who accepted the indecent proposal, it should anticipate anticipate how he will live after the night in question and therefore reject the contract proposed by Bob ...

Clearly, if people behaved like standard economic theory says, there would be no film!

So the question is whether, ultimately, people are "naïve" is to say do not anticipate that they may be dynamically inconsistent, or if they "are sophisticated," ie anticipate what will be their future preferences and adopt actions which today thwart potentially bad actions future of their ego (yes, I know reader, you can buy stocks of aspirin per tonne here). In short, if I am sophisticated, this my ego knows what future actions my ego is likely to adopt and the consequences attached to them, for me and for him. A sophisticated person knows that he plays first and the non-cooperative game theory can be applied to this interaction situation between my successive egos.

A recent experimental study has been published by John ^ 3 * Bone, Hey and Suckling in 2009 in Experimental Economics (*: all three are called John, where John the cube, a version of paper should appear here ). Their experiment involves different treatments in which participants make dynamic choices.
particular, in a treatment, subjects must choose between two decisions knowing that after this first series of decisions, Nature chooses one of two ways, and they will then choose one of two new decisions, and that after that decision, a state of nature will be chosen from among two possible (they present a "decision tree" that contains 2 * 2 * 2 * 2 = 16 branches). Of course, before selecting the 2nd time he will know what is the state of nature selected just before. The information is increasing over time. It looks something like this:
Source: Bone, Hey and Suckling, 2009


A key finding is that more than half the participants behave so "Naive" and not "sophisticated" as I explained above. The majority of subjects do not really planning decisions and does not conform to the way economists represent the dynamic choice. Moreover, the repetition of the experience does not improve this ratio, the participants are not sophisticated at the end of a learning problem that without apprentissage.La way of economists to represent the dynamic choice sophisticated in terms of behavior is thus largely beside the point, explain the authors.

So, despite artistic quality to say the least, the film Indecent Proposal seems a certain correctness in the way of representing the choices as they are actually made by people like you and me.
This leads me to thinking: can be in fact the writer of 'Indecent Proposal' was an experimentalist who could not publish his paper, and to survive, her story has refourgué Hollywood to make public its findings? Um, um, I'll try one of my papers refourguer TF1 for "Josephine Ange Gardien" but I do not say you, reader, which one. For you to guess and watch all the episodes at once to come.


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