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demand. The former learning effect, combined with the latter real-options effect, adversely affect firms' entry decisions and …
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A representative consumer uses Bayes' law to learn about parameters of several models and to construct probabilities with which to perform ongoing model averaging. The arrival of signals induces the consumer to alter his posterior distribution over models and parameters. The consumer's...
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behavioural models suggested by psychology (i.e., weighted probabilities applied to regret and rejoice theory), and by updating … probability estimations and outcome preferences according to the learning models suggested by neuroscience (i.e., adaptive … learning aimed at reducing surprises), and analogous to Bayesian updating. The search context is derived from experimental …
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We show that in the formalization of representativeness (Kahneman and Tversky (1972)) developed by Gennaioli and Shleifer (2010), overreaction and confidence are affected by uncertainty, as a news effect interacts with an uncertainty effect. In the time series domain, this interaction emerges in...
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