Misleading Omissions: A Bayesian Framework

16 Pages Posted: 12 Dec 2017 Last revised: 18 Feb 2019

Date Written: February 14, 2019

Abstract

Bayes' Theorem is a useful structure for better understanding what makes a statement misleading by omission. The Bayesian framework presented here has straightforward application to securities cases that involve misleading omissions. The framework extends to other areas as well, including cases of consumer fraud and similar claims. I illustrate the framework with an application to securities fraud and then to the misrepresentation of the addictive nature of a product, with reference to potentially misleading omissions about the addictiveness of opioids.

Keywords: Bayesian Analysis, Omissions, Omnicare, Opioid Litigation, Product Liability

JEL Classification: G14, G18, K22, K42

Suggested Citation

Heaton, J.B., Misleading Omissions: A Bayesian Framework (February 14, 2019). Available at SSRN: https://ssrn.com/abstract=3085050 or http://dx.doi.org/10.2139/ssrn.3085050

J.B. Heaton (Contact Author)

J.B. Heaton, P.C. ( email )

20 West Kinzie
17th Floor
Chicago, IL 60654
United States
(312) 487-2600 (Phone)

HOME PAGE: http://jbheaton.com

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