A Theory of Subjective Learning, Third Version

32 Pages Posted: 4 Dec 2013

See all articles by David Dillenberger

David Dillenberger

University of Pennsylvania - Department of Economics

Juan Sebastian Lleras

Carnegie Mellon University - Department of Social and Decision Sciences

Philipp Sadowski

Duke University - Department of Economics

Norio Takeoka

Yokohama National University - Department of Economics

Date Written: September 3, 2013

Abstract

We study an individual who faces a dynamic decision problem in which the process of information arrival is unobserved by the analyst. We elicit subjective information directly from choice behavior by deriving two utility representations of preferences over menus of acts. One representation uniquely identifies information as a probability measure over posteriors and the other identifies information as a partition of the state space. We compare individuals who expect to learn differently in terms of their preference for flexibility. On the extended domain of dated-menus, we show how to accommodate gradual learning over time by means of a subjective filtration.

Keywords: subjective learning, partitional learning, preference for flexibility, resolution of uncertainty, valuing more binary bets, subjective filtration, dated-menus

JEL Classification: D80, D81, D82

Suggested Citation

Dillenberger, David and Lleras, Juan Sebastian and Sadowski, Philipp and Takeoka, Norio, A Theory of Subjective Learning, Third Version (September 3, 2013). PIER Working Paper No. 13-067. Available at SSRN: https://ssrn.com/abstract=2362343 or http://dx.doi.org/10.2139/ssrn.2362343

David Dillenberger (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-1503 (Phone)

Juan Sebastian Lleras

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States

Philipp Sadowski

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States
919-660-1800 (Phone)

Norio Takeoka

Yokohama National University - Department of Economics ( email )

79-3 Tokiwadai
Yokohama, 240-8501
Japan

HOME PAGE: p://www.takeoka.ynu.ac.jp/

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