Estimating Bayesian Decision Problems with Heterogeneous Priors
AbstractIn many areas of economics there is a growing interest in how expertise and preferences drive individual and group decision making under uncertainty.Increasingly, we wish to estimate such models to quantify which of these drive decision making. In this paper we propose a newc hannel through which we can empirically identify expertise and preference parameters by using variation indecisions over heterogeneous priors.Relative to existing estimation approaches,our"Prior Based Identification" extends the possible environments which can be estimated, and also substantially improves the accuracy and precision of estimates in those environments which can be estimated using existing methods.
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Bibliographic InfoPaper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 135.
Date of creation: 2013
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Bayesian decision making; expertise; preferences; estimation.;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-16 (All new papers)
- NEP-CDM-2013-08-16 (Collective Decision-Making)
- NEP-DCM-2013-08-16 (Discrete Choice Models)
- NEP-SPO-2013-08-16 (Sports & Economics)
- NEP-UPT-2013-08-16 (Utility Models & Prospect Theory)
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Elsevier, vol. 21(3), pages 563-597, September.
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- Matias Iaryczower & Matthew Shum, 2012. "The Value of Information in the Court: Get It Right, Keep It Tight," American Economic Review, American Economic Association, vol. 102(1), pages 202-37, February.
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