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Non-Bayesian updating: A theoretical framework

Larry Epstein (), Jawwad Noor () and Alvaro Sandroni ()
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Alvaro Sandroni: Department of Economics, University of Pennsylvania

Theoretical Economics, 2008, vol. 3, issue 2

Abstract: This paper models an agent in a multi-period setting who does not update according to Bayes' Rule, and who is self-aware and anticipates her updating behavior when formulating plans. Choice-theoretic axiomatic foundations are provided to capture updating biases that reflect excessive weight given to either prior beliefs, or alternatively, to observed data. A counterpart of the exchangeable Bayesian learning model is also described.

Keywords: Non-Bayesian updating; temptation and self-control; overreaction; underreaction; learning; law of small numbers (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2008-06-01
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http://econtheory.org/ojs/index.php/te/article/viewFile/20080193/1819/85 (application/pdf)

Related works:
Working Paper: NON-BAYESIAN UPDATING: A THEORETICAL FRAMEWORK (2005)
Working Paper: NON-BAYESIAN UPDATING: A THEORETICAL FRAMEWORK (2005)
Working Paper: Non-Bayesian Updating: a Theoretical Framework (2005) Downloads
Working Paper: Non-Bayesian Updating: A Theoretical Framework (2003) Downloads
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