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Hard-to-Interpret Signals

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  • Larry G. Epstein
  • Yoram Halevy

Abstract

Decisions under uncertainty are often made with information that is difficult to interpret because multiple interpretations are possible. Individuals may perceive and handle uncertainty about interpretation differently and in ways that are not directly observable to a modeler. This paper identifies and experimentally examines behavior that can be interpreted as reflecting an individual's attitude towards such uncertainty.

Suggested Citation

  • Larry G. Epstein & Yoram Halevy, 2019. "Hard-to-Interpret Signals," Working Papers tecipa-634, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-634
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    References listed on IDEAS

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    Cited by:

    1. Jehiel, Philippe & Singh, Juni, 2021. "Multi-state choices with aggregate feedback on unfamiliar alternatives," Games and Economic Behavior, Elsevier, vol. 130(C), pages 1-24.
    2. Castagnetti, Alessandro & Schmacker, Renke, 2022. "Protecting the ego: Motivated information selection and updating," European Economic Review, Elsevier, vol. 142(C).

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    More about this item

    Keywords

    Ambiguity; updating; information; experiment;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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