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A Testable Theory of Imperfect Perception

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  • Andrew Caplin
  • Daniel Martin

Abstract

We provide a characterisation of choice behaviour generated by a Bayesian expected utility maximiser. The observable signature of this standard model is the impossibility of raising utility by switching wholesale from one action to another. We provide applications to robustness, to the recovery of utility from choice data and to model classification.
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Suggested Citation

  • Andrew Caplin & Daniel Martin, 2015. "A Testable Theory of Imperfect Perception," Economic Journal, Royal Economic Society, vol. 125(582), pages 184-202, February.
  • Handle: RePEc:wly:econjl:v:125:y:2015:i:582:p:184-202
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    File URL: http://hdl.handle.net/10.1111/ecoj.2015.125.issue-582
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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