Real and Assumed Information

Ned Augenblick, Matthew Backus, Andrew T. Little and Don A. Moore

AEA Papers and Proceedings, 2025, vol. 115, 643-47

Abstract: We consider a simplified version of the model in Augenblick et. al (2025), in which people use models to translate data into beliefs and predictions. We posit that they make correct inferences given a model but not unconditionally, forgetting model uncertainty, and demonstrate two implications: first, that new information can decrease confidence rather than increase it, if it prompts reconsideration of assumed models; second, that people with models may misunderstand what kind of information is persuasive to share with others.

JEL-codes: D83 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/pandp.20251109

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