On Deciding When to Decide
Abstract
We consider a decision maker who follows a status quo without reconsidering her implicit decision at every period. Only as a result of certain events will she ask herself whether she would like to change her choice. We ask when this mode of decision making is compatible with optimality. We state conditions on the set of databases that would make the decision maker take an explicit decision, which are equivalent to the following representation: the decision maker entertains a set of theories, of which one is that her current choice is the best; she is inert as long as that theory beats any alternative theory according to a maximum likelihood criterion.