Subjectivity in Inductive Inference
AbstractThis paper examines circumstances under which subjectivity enhances the effectiveness of inductive reasoning. We consider a game in which Fate chooses a data generating process and agents are characterized by inference rules that may be purely objective (or data-based) or may incorporate subjective considerations. The basic intuition is that agents who invoke no subjective considerations are doomed to "overfit" the data and therefore engage in ineffective learning. The analysis places no computational or memory limitations on the agents -- the role for subjectivity emerges in the presence of unlimited reasoning powers.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1725.
Length: 48 pages
Date of creation: Aug 2009
Date of revision:
Publication status: Published in Theortical Economics (May 2012), 7(2): 183-216
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Other versions of this item:
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- C0 - Mathematical and Quantitative Methods - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-11 (All new papers)
- NEP-CBA-2009-09-11 (Central Banking)
- NEP-GTH-2009-09-11 (Game Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Prospect Theory: An Analysis of Decision under Risk,"
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- Gilboa, Itzhak & Samuelson, Larry & Schmeidler, David, 2013. "Dynamics of inductive inference in a unified framework," Journal of Economic Theory, Elsevier, vol. 148(4), pages 1399-1432.
- Itzhak Gilboa & Larry Samuelson & David Schmeidler, 2011. "Dynamics of Inductive Inference in a Unified Framework," Cowles Foundation Discussion Papers 1811, Cowles Foundation for Research in Economics, Yale University.
- Itzhak Gilboa & Larry Samuelson & David Schmeidler, 2011. "Dynamics of Inductive Inference in a Unified Framework," Levine's Working Paper Archive 786969000000000156, David K. Levine.
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