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Persistent link: https://www.econbiz.de/10012090552
The paper applies the rule for adaptation of the aspiration level suggested by Gilboa and Schmeidler to a situation in which the similarity between acts is represented by an arbitrary similarity function [Gilboa, I., Schmeidler, D., 1996. Case-based optimization. Games Econ. Behav. 15, 1-26]. I...
Persistent link: https://www.econbiz.de/10005413838
We analyze a market populated by expected utility maximizers and smooth ambiguity-averse consumers. We study conditions under which ambiguity-averse consumers survive and affect prices in the limit. If ambiguity vanishes with time or if the economy exhibits no aggregate risk, ambiguity-averse...
Persistent link: https://www.econbiz.de/10011189747
We model decision making under ambiguity based on available data. Decision makers express preferences over actions and data sets. We derive an α-max–min representation of preferences, in which beliefs combine objective characteristics of the data (number and frequency of observations) with...
Persistent link: https://www.econbiz.de/10011043018
We present a model of technological adaptation in response to a change in climate conditions. The main feature of the model is that new technologies are not just risky, but also ambiguous. Pessimistic agents are thus averse to adopting a new technology. Learning is induced by optimists, who are...
Persistent link: https://www.econbiz.de/10011010751
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We build a dynamic political economy model with a two-class society, workers and the elite, in which the elite formation, the innovation rate and fiscal policy are endogenous. The model generates a mapping between institutions and patterns of growth consistent with empirical evidence. Ex ante,...
Persistent link: https://www.econbiz.de/10008860971
In this paper, we consider a decision maker who tries to learn the distribution of outcomes from previously observed cases. For each observed database of cases the decision maker predicts a set of priors expressing his beliefs about the underlying probability distribution. We impose a version of...
Persistent link: https://www.econbiz.de/10008869052