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Non-Bayesian updating: A theoretical framework

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Listed:
  • , G.

    (Department of Economics, Boston University)

  • ,

    (Department of Economics, Boston University)

  • ,

    (Department of Economics, University of Pennsylvania)

Abstract

This paper models an agent in a multi-period setting who does not update according to Bayes' Rule, and who is self-aware and anticipates her updating behavior when formulating plans. Choice-theoretic axiomatic foundations are provided to capture updating biases that reflect excessive weight given to either prior beliefs, or alternatively, to observed data. A counterpart of the exchangeable Bayesian learning model is also described.

Suggested Citation

  • , G. & , & ,, 2008. "Non-Bayesian updating: A theoretical framework," Theoretical Economics, Econometric Society, vol. 3(2), June.
    • Handle: RePEc:the:publsh:253
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    References listed on IDEAS

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    More about this item

    Keywords

    Non-Bayesian updating; temptation and self-control; overreaction; underreaction; learning; law of small numbers;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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