Since central banks have limited information concerning the transmission channel of monetary policy, they are faced with the difficult task of simultaneously controlling the policy target and estimating the impact of policy actions. A tradeoff between estimation and control arises because policy...

We study the evolution of prices in a symmetric duopoly where firms are uncertain about the degree of product differentiation. Customers sometimes perceive the products as close substitutes, sometimes as highly differentiated. Firms learn about their competitive environment from the quantities...

Since central banks have limited information concerning the transmission channel of monetary policy, they are faced with the difficult task of simultaneously controlling the policy target and estimating the impact of policy actions. A tradeoff between estimation and control arises because policy...

Agricultural yields depend on an encompassing set of technical and environmental factors. The development of such factors often is not fully observable, and their interactions and impacts on yields have not been completely understood. This paper proposes a Bayesian method for forming...

Agricultural yields depend on an encompassing set of technical and environmental factors. The development of such factors often is not fully observable, and their interactions and impacts on yields have not been completely understood. This paper proposes a Bayesian method for forming...

We analyze a two-player game of strategic experimentation with two-armed bandits. Each player has to decide in continuous time whether to use a safe arm with a known payoff or a risky arm whose likelihood of delivering payoffs is initially unknown. The quality of the risky arms is perfectly...

This appendix applies the model in ”Non-Bayesian Updating: A Theoretical Frame-Work” to address the question: What do non-Bayesian updaters learn?

In this paper, we develop a structural model of household behavior in an environment where there is uncertainty about brand attributes and both prices and advertising signal brand quality. Four quality signaling mechanisms are at work: (1) price signals quality, (2) advertising frequency signals...