A Theory of Subjective Learning, Third Version

David Dillenberger (), Juan Lleras (), Philipp Sadowski () and Norio Takeoka ()
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David Dillenberger: Department of Economics, University of Pennsylvania
Juan Lleras: Department of Social and Decision Sciences, Carnegie Mellon University
Philipp Sadowski: Department of Economics, Duke University
Norio Takeoka: Department of Economics, Yokohama National University

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: We study an individual who faces a dynamic decision problem in which the process of information arrival is unobserved by the analyst. We elicit subjective information directly from choice behavior by deriving two utility representations of preferences over menus of acts. One representation uniquely identifies information as a probability measure over posteriors and the other identifies information as a partition of the state space. We compare individuals who expect to learn differently in terms of their preference for flexibility. On the extended domain of dated-menus, we show how to accommodate gradual learning over time by means of a subjective filtration.

Keywords: Subjective learning; partitional learning; preference for flexibility; resolution of uncertainty; valuing more binary bets; subjective filtration; dated-menus (search for similar items in EconPapers)
JEL-codes: D80 D81 D82 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2012-08-01, Revised 2013-09-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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