How do people update beliefs? Evidence from the laboratory

 

ارائه کننده:  دکتر شروین تهرانی، استاد دانشگاه Texas at Dallas

زمانچهارشنبه ۱۶  تیر  ۱۴۰۰ ساعت ۱۴:۳۰ تا ۱۶:۰۰

آدرس برگزاری وبینار:

https://vclass.ecourse.sharif.edu/ch/business-research

 

 

About the Speaker

My name is Shervin Shahrokhi Tehrani. I received my Ph.D. in Mathematics & Marketing from the University of Toronto. I am a theorist and an empirical researcher in marketing. My first paper was about the benefit of selling the product through competitor outlets. My recent research shows that sending the right message to the right consumers can be profitable even in a competitive market where all firms do advertising targeting. The heart of my research is to construct practical and pragmatic models to explain people’s choice behavior under bounded rationality. Also, I have some work in progress related to advertising strategy in political campaigns, herding behavior, and the dialysis industry in the US.

 

Abstract

The Bayes’ rule serves as a cornerstone for learning models when researchers observe consumer choice, but not underlying beliefs. In this paper, we design a laboratory experiment to directly elicit subjects’ posterior beliefs as she receives more information about a random variable in a dynamic setting. We elicit both mean and the uncertainty associated with it and investigate subjects’ belief updating rules without assuming strict adherence to the Bayes’ rule. We find that subjects are heterogeneous in their belief updating rules. Relative to Bayesian updating, some subjects are too conservative and others are overly reactive to new information signals. Moreover, as subjects receive more signals, their updating rules slowly change over time. Nonetheless, subjects of all types become more reactive to new signals and become more certain about their beliefs as they receive more signals. In addition, subjects assign greater weight to surprising signals and their beliefs become more diffused.