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Expanding the Weighted Updating Model

Author

Listed:
  • Jesse Aaron Zinn

    (College of Business, Clayton State University)

Abstract

This work casts light upon a pair of restrictions inherent to the basic weighted updating model, which is a generalization of Bayesian updating that allows for biased learning. Relaxing the restrictions allows for the study of individuals who discriminate between observations or who treat information in a dynamically inconsistent manner. These generalizations augment the set of cognitive biases that can be studied using new versions of the weighted updating model to include the availability heuristic, order effects, self-attribution bias, and base-rate neglect in light of irrelevant information.

Suggested Citation

  • Jesse Aaron Zinn, 2015. "Expanding the Weighted Updating Model," Economics Bulletin, AccessEcon, vol. 35(1), pages 182-186.
    • Handle: RePEc:ebl:ecbull:eb-14-00765
    as

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    References listed on IDEAS

    as
    1. Daniel J. Benjamin & Matthew Rabin & Collin Raymond, 2016. "A Model of Nonbelief in the Law of Large Numbers," Journal of the European Economic Association, European Economic Association, vol. 14(2), pages 515-544.
    2. Grether, David M., 1992. "Testing bayes rule and the representativeness heuristic: Some experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 17(1), pages 31-57, January.
    3. Thomas R. Palfrey & Stephanie W. Wang, 2012. "Speculative Overpricing in Asset Markets With Information Flows," Econometrica, Econometric Society, vol. 80(5), pages 1937-1976, September.
    4. Zinn, Jesse, 2013. "Modelling Biased Judgement with Weighted Updating," MPRA Paper 50310, University Library of Munich, Germany.
    5. Stephanie Wang, 2012. "Speculative Overpricing in Asset Markets with Information Flows," Working Paper 489, Department of Economics, University of Pittsburgh, revised Jan 2012.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bayesian Updating; Cognitive Biases; Heuristics; Learning; Risk; Uncertainty;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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