An incomplete ignorance state in repeated-play decision making: A note on Bayesian decision-theoretical framework
AbstractThere has been much reported on decisions from experience, also referred to as decisions in a complete ignorance fashion. This note lays out a Bayesian decision-theoretical framework that provides a computable account for decisions from experience. To make the framework more tractable, this note sets up and examines decisions in a incomplete ignorance fashion. The current discussion asserts that well-known behavioural effects, such as the hot stove effect, and the Bayesian framework may lead to different predictions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 28265.
Date of creation: 01 Dec 2010
Date of revision:
Bayesian updating; complete ignorance; decisions from experience; incomplete ignorance;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-05 (All new papers)
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.:
- Takemi Fujikawa, 2009. "On the relative importance of the hot stove effect and the tendency to rely on small samples," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(5), pages 429-435, August.
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