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Article: Information Validates the Prior: A Theorem on Bayesian Updating and Applications
Title | Information Validates the Prior: A Theorem on Bayesian Updating and Applications |
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Authors | |
Issue Date | 2021 |
Publisher | American Economic Association. The Journal's web site is located at http://www.aeaweb.org/aer/index.php |
Citation | The American Economic Review, 2021, v. 3 n. 2, p. 165-182 How to Cite? |
Abstract | We develop a result on expected posteriors for Bayesians with heterogenous priors, dubbed information validates the prior (IVP). Under familiar ordering requirements, Anne expects a (Blackwell) more informative experiment to bring Bob's posterior mean closer to Anne's prior mean. We apply the result in two contexts of games of asymmetric information: voluntary testing or certification, and costly signaling or falsification. IVP can be used to determine how an agent's behavior responds to additional exogenous or endogenous information. We discuss economic implications. |
Persistent Identifier | http://hdl.handle.net/10722/300233 |
ISSN | 2023 Impact Factor: 10.5 2023 SCImago Journal Rankings: 22.344 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Kartik, N | - |
dc.contributor.author | Lee, FX | - |
dc.contributor.author | Suen, W | - |
dc.date.accessioned | 2021-06-04T08:40:02Z | - |
dc.date.available | 2021-06-04T08:40:02Z | - |
dc.date.issued | 2021 | - |
dc.identifier.citation | The American Economic Review, 2021, v. 3 n. 2, p. 165-182 | - |
dc.identifier.issn | 0002-8282 | - |
dc.identifier.uri | http://hdl.handle.net/10722/300233 | - |
dc.description.abstract | We develop a result on expected posteriors for Bayesians with heterogenous priors, dubbed information validates the prior (IVP). Under familiar ordering requirements, Anne expects a (Blackwell) more informative experiment to bring Bob's posterior mean closer to Anne's prior mean. We apply the result in two contexts of games of asymmetric information: voluntary testing or certification, and costly signaling or falsification. IVP can be used to determine how an agent's behavior responds to additional exogenous or endogenous information. We discuss economic implications. | - |
dc.language | eng | - |
dc.publisher | American Economic Association. The Journal's web site is located at http://www.aeaweb.org/aer/index.php | - |
dc.relation.ispartof | The American Economic Review | - |
dc.rights | The American Economic Review. Copyright © American Economic Association. | - |
dc.title | Information Validates the Prior: A Theorem on Bayesian Updating and Applications | - |
dc.type | Article | - |
dc.identifier.email | Suen, W: hrneswc@hku.hk | - |
dc.identifier.authority | Suen, W=rp00066 | - |
dc.description.nature | published_or_final_version | - |
dc.identifier.doi | 10.1257/aeri.20200284 | - |
dc.identifier.hkuros | 322700 | - |
dc.identifier.volume | 3 | - |
dc.identifier.issue | 2 | - |
dc.identifier.spage | 165 | - |
dc.identifier.epage | 182 | - |
dc.identifier.isi | WOS:000672752100003 | - |
dc.publisher.place | United States | - |