Chiodo, Abbigail; Guidolin, Massimo; Owyang, Michael T.; … - Federal Reserve Bank of St. Louis - 2003
when assessing the likelihood of uncertain events. We construct a simple model of belief formation that incorporates these …Real-life decision makers are often forced to estimate the likelihood of uncertain future events. Usually, economists … assume that agents behave as though they are fully rational, employing statistical rules to assess probabilities, and that …