Estimating Bayesian Decision Problems with Heterogeneous Priors
In many areas of economics there is a growing interest in how expertise and preferences drive individual and group decision making under uncertainty. Increasingly, we wish to estimate such models to quantify which of these drive decision making. In this paper we propose a new channel through which we can empirically identify expertise and preference parameters by using variation in decisions over heterogeneous priors. Relative to existing estimation approaches, our Prior Based Identication" extends the possible environments which can be estimated, and also substantially improves the accuracy and precision of estimates in those environments which can be estimated using existing methods.
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- Stephen Hansen & Carlos Velasco Rivera & Michael McMahon, 2013.
"How Experts Decide: Preferences or Private Assessments on a Monetary Policy Committee?,"
CAMA Working Papers
2013-19, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
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- Kiel, Alexandra & Gerling, Kerstin & Schulte, Elisabeth & Grüner, Hans Peter, 2003.
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Working Paper Series
0256, European Central Bank.
- Gerling, Kerstin & Gruner, Hans Peter & Kiel, Alexandra & Schulte, Elisabeth, 2005. "Information acquisition and decision making in committees: A survey," European Journal of Political Economy, Elsevier, vol. 21(3), pages 563-597, September.
- Iaryczower, Matias & Lewis, Garrett & Shum, Matthew, 2013. "To elect or to appoint? Bias, information, and responsiveness of bureaucrats and politicians," Journal of Public Economics, Elsevier, vol. 97(C), pages 230-244.
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