When Does Ambiguity Fade Away?
9 Pages Posted: 30 Oct 2019
Date Written: October 22, 2019
Is long-run ambiguity a possible outcome of the multiple prior Bayesian learning model? If the prior support is finite, long-run ambiguity is known to be a possible outcome only if the learning problem is misspecified (Marinacci-Massari 2019). Conversely, here we show that, under natural assumptions, ambiguity fades away on most paths if the prior support is naturally rich.
Keywords: ambiguity, learning, robust statistical decisions, misspecified learning
JEL Classification: D81, D83, C11
Suggested Citation: Suggested Citation