Bayes' theorem incorporates distinct types of information through the likelihood and prior. Direct observations of state variables enter the likelihood and modify posterior probabilities through consistent updating. Information in terms of expected values of state variables modify posterior...

As the U.S. government has become increasingly intolerant of national security risks sometimes attendant to foreign investment, Stephen Heifetz suggests the government should consider the costs of that risk avoidance and should alter its approach.

Ambiguity, also called Knightian or model uncertainty, is a key feature in financial modeling. A recent paper by Maccheroni et al. (2004) characterizes investor preferences under aversion against both risk and ambiguity. Their result shows that these preferences can be numerically represented in...

We analyze the two goals behind the European Bologna Process of increasing student mobility: enabling graduates to develop multi-cultural skills and increasing the quality of universities. We isolate three effects: 1) a competition effect that raises quality; 2) a free rider effect that lowers...

In an information cascade experiment participants are confronted with artificial predecessors predicting in line with the BHW model (Bikchandani et al. 1992). Using the BDM (Becker et al., 1964) mechanism we study participants' probability perceptions based on maximum prices for participating in...