eprintid: 17512
rev_number: 37
eprint_status: archive
userid: 2744
dir: disk0/00/01/75/12
datestamp: 2014-10-21 09:44:39
lastmod: 2016-01-18 07:58:55
status_changed: 2014-10-21 09:44:39
type: workingPaper
metadata_visibility: show
creators_name: Heyen, Daniel
title: Learning under Ambiguity - A Note on the Belief Dynamics of
Epstein and Schneider (2007)
subjects: 330
divisions: 181000
keywords: learning under ambiguity, multiple prior, maxmin, ambiguity aversion
abstract: 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
id_scheme: DOI
id_number: 10.11588/heidok.00017512
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0573
ppn_swb: 1659402379
own_urn: urn:nbn:de:bsz:16-heidok-175124
language: eng
bibsort: HEYENDANIELEARNINGUN201410
full_text_status: public
series: Discussion Paper Series, University of Heidelberg, Department of Economics
volume: 0573
place_of_pub: Heidelberg
pages: 21
citation:   Heyen, Daniel  (2014) Learning under Ambiguity - A Note on the Belief Dynamics of Epstein and Schneider (2007).  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/17512/1/Heyen_2014_dp573.pdf