The literature on experimentation and learning typically imposes a special dynamic structure: The only connection between periods is the updating of beliefs. Hence, both the present action and present signal realization only affect the future by changing the distribution of future beliefs. In...

The welfare change from a price increase-for example, the compensating variation (cv)-is often calculated using the expenditure function from an estimated demand. If there is unobserved preference heterogeneity, then the estimated demand is an average over households with different preferences....