limited belief propagation

[Ran Spiegler]

Dear all,

Andrew Ellis and I have a new paper which may be relevant for members of this forum. It presents a new approach to modeling limited contingent thinking:

https://05f571a4-a44b-4f0b-9345-e7a569b0109b.filesusr.com/ugd/4871e3_30338922bce74b9b9b8d09b737270d01.pdf

Abstract: An agent updates her beliefs over a set of variables after observing some of them. We provide a representation of updated beliefs that captures limited propagation of her observation's implications through the directed acyclic graph that represents the relations between all variables. Failure of contingent thinking occurs when she performs fewer inference steps from unobserved variables than observed ones, leading to correlation neglect and violations of iterated expectations. Our framework offers a new perspective on existing experiments about contingent thinking and suggests new directions. We characterize the model's relationship with familiar Bayesian and non-Bayesian benchmarks, and illustrate it with applications to public-good provision and social learning games.

In case you're interested.

Rani

Ran Spiegler

School of Economics, Tel Aviv University

&

Department of Economics, University College London

URL: https://www.ranspiegler.sites.tau.ac.il/ 

New book: The Curious Culture of Economic Theory (MIT Press)

Social media book pages: X @rani_spiegler, Bluesky @rani-spiegler.bsky.social