Switching Cost Models as Hypothesis Tests

Samuel N. Cohen, Timo Henckel (), Gordon D. Menzies, Johannes Muhle-Karbe and Daniel Zizzo

Papers from arXiv.org

Abstract: We relate models based on costs of switching beliefs (e.g. due to inattention) to hypothesis tests. Specifically, for an inference problem with a penalty for mistakes and for switching the inferred value, a band of inaction is optimal. We show this band is equivalent to a confidence interval, and therefore to a two-sided hypothesis test.

Date: 2018-08
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Switching cost models as hypothesis tests (2019)
Working Paper: Switching cost models as hypothesis tests (2018)
Working Paper: Switching Cost Models as Hypothesis Tests (2018)
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