Choosing Treatment Policies Under Ambiguity
AbstractEconomists studying choice with partial knowledge typically assume that the decision maker places a subjective distribution on unknown quantities and maximizes expected utility. Someone lacking a subjective distribution faces a problem of choice under ambiguity. This article reviews recent research on policy choice under ambiguity, when the task is to choose treatments for a population. Ambiguity arises when a planner has partial knowledge of treatment response and does not feel able to place a subjective distribution on the unknowns. I first discuss dominance and alternative criteria for choice among undominated policies. I then illustrate with the choice of a vaccination policy by a planner who has partial knowledge of the effect of vaccination on illness. I next study a class of problems in which a planner may want to cope with ambiguity by diversification, assigning observationally identical persons to different treatments. Lastly, I consider a setting in which a planner should not diversify treatment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Annual Reviews in its journal Annual Review of Economics.
Volume (Year): 3 (2011)
Issue (Month): 1 (09)
Contact details of provider:
Postal: Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA
Web page: http://www.annualreviews.org
Find related papers by JEL classification:
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- BERGER, Loïc & BLEICHRODT, Han & EECKHOUDT, Louis, .
"Treatment decisions under ambiguity,"
CORE Discussion Papers RP
-2494, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Larry G. Epstein & Kyoungwon Seo, 2013. "Bayesian Inference and Non-Bayesian Prediction and Choice: Foundations and an Application to Entry Games with Multiple Equilibria," Boston University - Department of Economics - Working Papers Series WP2013-001, Boston University - Department of Economics.
- Hahn, Jinyong & Ridder, Geert & Snider, Connan, 2013. "Partial identification and mergers," Economics Letters, Elsevier, vol. 118(1), pages 126-129.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (http://www.annualreviews.org).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.