Subjective Bayesian Beliefs

Constantinos Antoniou; Glenn W. Harrison; Morten I. Lau; Daniel Read

doi:10.1007/s11166-015-9208-5

Subjective Bayesian Beliefs

Constantinos Antoniou, Glenn W. Harrison, Morten I. Lau, Daniel Read

Department of Economics

Research output: Contribution to journal › Journal article › Research › peer-review

Abstract

A large literature suggests that many individuals do not apply Bayes’ Rule when making decisions that depend on them correctly pooling prior information and sample data. We replicate and extend a classic experimental study of Bayesian updating from psychology, employing the methods of experimental economics, with careful controls for the confounding effects of risk aversion. Our results show that risk aversion significantly alters inferences on deviations from Bayes’ Rule.

Original language	English
Journal	Journal of Risk and Uncertainty
Volume	50
Issue number	1
Pages (from-to)	35-54
Number of pages	20
ISSN	0895-5646
DOIs	https://doi.org/10.1007/s11166-015-9208-5
Publication status	Published - Feb 2015

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title = "Subjective Bayesian Beliefs",

abstract = "A large literature suggests that many individuals do not apply Bayes{\textquoteright} Rule when making decisions that depend on them correctly pooling prior information and sample data. We replicate and extend a classic experimental study of Bayesian updating from psychology, employing the methods of experimental economics, with careful controls for the confounding effects of risk aversion. Our results show that risk aversion significantly alters inferences on deviations from Bayes{\textquoteright} Rule.",

keywords = "Bayes{\textquoteright} Rule, Subjective beliefs, Learning",

author = "Constantinos Antoniou and Harrison, {Glenn W.} and Lau, {Morten I.} and Daniel Read",

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AU - Antoniou, Constantinos

AU - Harrison, Glenn W.

AU - Lau, Morten I.

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AB - A large literature suggests that many individuals do not apply Bayes’ Rule when making decisions that depend on them correctly pooling prior information and sample data. We replicate and extend a classic experimental study of Bayesian updating from psychology, employing the methods of experimental economics, with careful controls for the confounding effects of risk aversion. Our results show that risk aversion significantly alters inferences on deviations from Bayes’ Rule.

KW - Bayes’ Rule

KW - Subjective beliefs

KW - Learning

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DO - 10.1007/s11166-015-9208-5

M3 - Journal article

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