Learning under ambiguity: An experiment in gradual information processing

摘要

This experiment studies belief updating under ambiguity, using subjects & rsquo; bid and ask prices for an asset with ambiguous payoff distribution. Bid and ask quotes allow for distinguishing between the two main paradigms of updating under ambiguity & ndash;full Bayesian updating and maximum likelihood updating. We find substantial heterogeneity in subjects & rsquo; reaction to information. The majority of subjects (54%) chose quotes that were in line with full Bayesian updating, while another, non-negligible, group (35%) behaved like maximum likelihood updaters.(c) 2021 Elsevier Inc. All rights reserved.