another recent paper from the EJ examines how we should release information to someone with particular forms of limited memory. This draws heavily on a well-known paper on memory in the QJE. Interesting how both papers combine well-known experimental results in psychology with mathematical techniques most used in economic theory.
Mullainathan, S. (2002). ‘A memory based model of bounded rationality’, Quarterly Journal of Economics, vol. 17 (3), pp. 735–74.
CrossRef
What Have you Done for me Lately? Release of Information and Strategic Manipulation of Memories Yianis Sarafidis
Abstract
How should a rational agent (politician/employee/advertiser) release information in order to manipulate the memory imperfections of his forgetful assessor (electorate/supervisor/consumer)? This article attempts to answer this question using a memory model based on the principles of recency, similarity and repetition. I show that the problem of a rational agent who releases information to a forgetful assessor can be modelled as a standard dynamic optimisation problem and we describe the properties of the optimal profile for releasing information. The theoretical results are applicable in a wide range of social and economic contexts, such as political campaigns, employee performance evaluations and advertising strategies.
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