Chapter The Price of Uncertainty in Present-Biased Planning

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Tác giả: Susanne Albers, Dennis Kraft

Ngôn ngữ: eng

ISBN: 9783319719245_23

Ký hiệu phân loại:

Thông tin xuất bản: Springer Nature 2017

Mô tả vật lý: 1 electronic resource (15 p.)

Bộ sưu tập: NCBI

ID: 241783

The tendency to overestimate immediate utility is a common cognitive bias. As a result people behave inconsistently over time and fail to reach long-term goals. Behavioral economics tries to help affected individuals by implementing external incentives. However, designing robust incentives is often difficult due to imperfect knowledge of the parameter β ∈ (0, 1] quantifying a person's present bias. Using the graphical model of Kleinberg and Oren [8], we approach this problem from an algorithmic perspective. Based on the assumption that the only information about β is its membership in some set B ⊂ (0, 1], we distinguish between two models of uncertainty: one in which β is fixed and one in which it varies over time. As our main result we show that the conceptual loss of effi- ciency incurred by incentives in the form of penalty fees is at most 2 in the former and 1 + max B/ min B in the latter model. We also give asymptotically matching lower bounds and approximation algorithms.
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