Updating under imprecise information
Lin, Yi-Hsuan (Academia Sinica (Taiwan))
Payro Chew, Fernando (Universitat Autònoma de Barcelona)

Imprint:	Barcelona: Barcelona School of Economics, 2024
Description:	34 pàg.
Abstract:	This paper models an agent that ranks actions with uncertain payoffs after observing a signal that could have been generated by multiple objective information structures. Under the assumption that the agent's preferences conform to the multiple priors model (Gilboa and Schmeidler (1989)), we show that a simple behavioral axiom characterizes a generalization of Bayesian Updating. Our axiom requires that whenever all possible sources of information agree that it is more 'likely' for an action with uncertain payoffs to be better than one with certain payoffs, the agent prefers the former. We also provide axiomatizations for several special cases. Finally, we consider the situation where the informational content of a signal is purely subjective. We characterize the existence of a subjective set of information structures under full Bayesian updating for two extreme cases: (i) No ex-ante state ambiguity, and (ii) No signal ambiguity.
Grants:	Agencia Estatal de Investigación PGC2018-094348-B-I00 Agencia Estatal de Investigación PID2020-116771GB-I00 Agencia Estatal de Investigación CEX2019-000915-S
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Language:	Anglès
Series:	BSE Barcelona School of Economics Working Papers ; 1424
Document:	Working paper ; recerca ; Versió publicada
Subject:	Updating ; Ambiguity ; Imprecise information ; MaxMin

Adreça alternativa: https://bse.eu/research/working-papers/updating-under-imprecise-information

34 p, 461.4 KB

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