Becker Friedman Institute

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Selfconfirming long run biases

We consider a myopic decision maker facing a recurrent decision problem. We study selfconfirming strategies. We show that a long run bias emerges that favors “tested” actions, that is, actions on which information has been collected over time. In so doing we provide, inter alia, a learning foundation for the selfconfirming equilibrium with model uncertainty of Battigalli et al. (2011).

Authors: 
Simone Cerreia Vioglio, Bocconi University
Pierpaolo Battigalli, Università Bocconi
Fabio Maccheroni, Università Bocconi
Massimo Marinacci, Bocconi University
Publication Date: 
February, 2013
BFI Initiative: 
Publication Status: