Ambiguity and Partial Bayesian Updating

Matthew Kovach

Papers from arXiv.org

Abstract: Models of updating a set of priors either do not allow a decision maker to make inference about her priors (full bayesian updating or FB) or require an extreme degree of selection (maximum likelihood updating or ML). I characterize a general method for updating a set of priors, partial bayesian updating (PB), in which the decision maker (i) utilizes an event-dependent threshold to determine whether a prior is likely enough, conditional on observed information, and then (ii) applies Bayes' rule to the sufficiently likely priors. I show that PB nests FB and ML and explore its behavioral properties.

Date: 2021-02, Revised 2023-03
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (4)

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Journal Article: Ambiguity and partial Bayesian updating (2024)
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