Many papers have reported behavioral biases in belief formation that come on top of standard game-theoretic reasoning. We show that the processes involved depend on the way participants reason about their beliefs. When they think about what everybody else or another "unspeci fied" individual is...

We propose a model of optimal decision making subject to a memory constraint. The constraint is a limit on the complexity of memory measured using Shannon's mutual information, as in models of rational inattention; but our theory differs from that of Sims (2003) in not assuming costless memory...

In many decisions under uncertainty, there are constraints on both the available information and the feasible actions. The agent can only make certain observations of the state space, and she cannot make them with perfect accuracy — she has imperfect perception. Likewise, she can only perform...

Chapter 1. Introduction -- Chapter 2. The Art of Conjecture: Probability and Utility -- Chapter 3. Uncertainty According to Knight and Keynes -- Chapter 4. Von Neumann, Morgenstern and Decision-making under Risk -- Chapter 5. Ramsey, de Finetti and Savage: Decisions under Uncertainty -- Chapter...