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.
|Date of creation:||Apr 2013|
|Date of revision:|
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- Stephen Hansen & Michael McMahon & Carlos Velasco Rivera, 2013.
"How Expoerts Decide: Preferences or Private Assessments on a Monetary Policy Committee?,"
CESifo Working Paper Series
4201, CESifo Group Munich.
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"Information acquisition and decision making in committees: a survey,"
Working Paper Series
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- 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.
- Matias Iaryczower & Matthew Shum, 2012. "The Value of Information in the Court: Get It Right, Keep It Tight," American Economic Review, American Economic Association, vol. 102(1), pages 202-37, February.
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