ISSN:
1573-7187
Schlagwort(e):
Bayesian updating
;
first-order stochastic dominance
Quelle:
Springer Online Journal Archives 1860-2000
Thema:
Sociologie
,
Wirtschaftswissenschaften
Notizen:
Abstract Adapting a definition introduced by Milgrom (1981) we say that a signal about the environment is good news relative to some initial beliefs if the posterior beliefs dominate the initial beliefs in the sense of first-order stochastic dominance (the assumption being that higher values of the parameter representing the environment mean better environments). We give an example where good news leads to the adoption of a more pessimistic course of action (we say that action a 1, reveals greater pessimism than action a 2, if it gives higher payoff in bad environments and lower payoff in good environments). We then give sufficient conditions for a signal not to induce a more pessimistic choice of action.
Materialart:
Digitale Medien
URL:
http://dx.doi.org/10.1007/BF00134156
Permalink
