title: Learning under Ambiguity - A Note on the Belief Dynamics of  Epstein and Schneider (2007)
creator: Heyen, Daniel
subject: 330
subject: 330 Economics
description: Epstein and Schneider (2007) develop a framework of learning under ambiguity, generalizing maxmin preferences of Gilboa and Schmeidler (1989) to intertemporal settings. The specific belief dynamics in Epstein and Schneider (2007) rely on the rejection of initial priors that have become implausible over the learning process. I demonstrate that this feature of ex-post rejection of theories gives rise to choices that are in sharp contradiction with ambiguity aversion. Concrete, the intertemporal maxmin decision-maker equipped with such belief dynamics prefers, under prevalent conditions, a bet in an ambiguous urn over the same bet in a risky urn. I offer two modifications of their framework, each of which is capable of avoiding this anomaly.
date: 2014-10
type: Working paper
type: info:eu-repo/semantics/workingPaper
type: NonPeerReviewed
format: application/pdf
identifier: https://archiv.ub.uni-heidelberg.de/volltextserverhttps://archiv.ub.uni-heidelberg.de/volltextserver/17512/1/Heyen_2014_dp573.pdf
identifier: DOI:10.11588/heidok.00017512
identifier: urn:nbn:de:bsz:16-heidok-175124
identifier:   Heyen, Daniel  (2014) Learning under Ambiguity - A Note on the Belief Dynamics of Epstein and Schneider (2007).  [Working paper]     
relation: https://archiv.ub.uni-heidelberg.de/volltextserver/17512/
rights: info:eu-repo/semantics/openAccess
rights: http://archiv.ub.uni-heidelberg.de/volltextserver/help/license_urhg.html
language: eng