Naive Frequentists and Redundant Information by David Walker-Jones

Join us for this week's event in the Behavioural, Experimental and Development Economics Seminar Series, Autumn Term 2024

Join David Walker-Jones, from the University of Surrey, as they present research on Naive Frequentists and Redundant Information.

Abstract

This paper introduces the Naive Frequentist model of belief updating, in which a decision maker updates their beliefs by taking simple averages of the numeric values in their most recent pieces of information, and tests the predictions of the model with an experiment. The model provides a parameter free prediction of posterior beliefs in a wide range of updating problems, does not require knowledge of the decision maker’s prior or their perception of the accuracy of information, and in many situations predicts large updates that are in the opposite direction of the change predicted by Bayes’ rule. Our experiment features pieces of repeated, redundant, and inaccurate information, that should all be ignored by a Bayesian, and yet our model predicts should change beliefs in a specific way. Even though our setting is a simple one where Bayesian updating is normally as easy as averaging two integers, we observe large and systematic deviations from the predictions of the Bayesian model that are roughly in line with the predictions of the Naive Frequentist model, and predict simple contexts in another dataset on more standard “ball and urn” updating where a large majority of subjects update in the wrong direction.

This seminar will be held in the Economics Common Room on Wednesday 4 December, at 11.00am. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Behavioural, Experimental, and Development Economics Research Seminar Series.