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Refutation-Resistant Beliefs

Author

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  • Mechtenberg, Lydia
  • Xefteris, Dimitrios
  • Zudenkova, Galina

Abstract

Beliefs often shape the very data used to evaluate them. We study a minimax refutation-resistance criterion that ranks misspecified beliefs by worst-case prediction error at their own induced action. In a linear two-activity model, the unique refutation-resistant belief equalizes inputs, is fully refutation-resistant, and coincides with the unique payoff-pessimistic belief, i.e., the belief minimizing predicted payoff. We then characterize the environments in which this equivalence between refutation resistance and payoff pessimism extends beyond the linear benchmark, and show that refutation resistance hinges on the existence of actions at which candidate technologies generate identical payoff predictions. This diagnostic structure allows us to delineate technology classes for which fully refutation-resistant beliefs exist and to identify when such beliefs are necessarily payoff-pessimistic.

Suggested Citation

  • Mechtenberg, Lydia & Xefteris, Dimitrios & Zudenkova, Galina, 2026. "Refutation-Resistant Beliefs," CEPR Discussion Papers 21818, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21818
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    Keywords

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    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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