TY  - GEN
UR  - https://archiv.ub.uni-heidelberg.de/volltextserver/17512/
EP  - 21
TI  - Learning under Ambiguity - A Note on the Belief Dynamics of
Epstein and Schneider (2007)
Y1  - 2014/10//
A1  - Heyen, Daniel
N2  - 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.
KW  - learning under ambiguity
KW  -  multiple prior
KW  -  maxmin
KW  -  ambiguity aversion
CY  - Heidelberg
ID  - heidok17512
AV  - public
T3  - Discussion Paper Series, University of Heidelberg, Department of Economics
ER  -