Consistent planning, backwards induction, and rule-governed behavior

This paper argues that with regard to sequential choice problems the set of assumptions that are necessary for the process of planning to be logically consistent may make the notion of rational dynamic consistency an unacceptable prescription for choice. In this sense, motivational limits to rationality may arise, adding to the inability of making consistent plans an unwillingness to engage in planning consistently. A different notion of planning, centered around the notion of self-commitment and rule-governed behavior may appear to be a more natural solution to optimal sequential choice. Copyright Kluwer Academic Publishers 1996