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Bayesian Updating (bayesian + updating)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting50%

Selected Abstracts

Comparison of updating techniques in transferability analysis of work trip mode choice models in developing countries

JOURNAL OF ADVANCED TRANSPORTATION, Issue 2 2010
Djoen San Santoso
Abstract This study analyzes the performances of updating techniques in transferability of mode choice models in developing countries. A model specification, estimated in Ho Chi Minh City, was transferred to Phnom Penh. Naïve transfer and four updating methods associated with small sized samples were used in the transfer process and were evaluated based on statistical perspective and predictive ability. The study also illustrates the problems faced in model transferability development, due to the lack of available and suitable data in Phnom Penh. This lack is strongly related to different methods and structures applied in collecting the data. Simplified approaches to the difficulties are proposed in the study. The results show that updating ASCs, updating both ASCs and scale parameter, and use of combined transfer estimators all produce significant improvement, both statistically and in predictability, in updating the model. The last two methods have proven to be superior to the first method, owing to the inclusion of transfer bias considerations in the estimations. However, small data samples should not have large transfer bias when using combined transfer estimators. It is also concluded that naïvely transferring a model is not recommended, and Bayesian updating should be avoided when transfer bias exists. Copyright © 2010 John Wiley & Sons, Ltd. [source]

The Impact of Insurance Prices on Decision Making Biases: An Experimental Analysis

JOURNAL OF RISK AND INSURANCE, Issue 2 2003
Susan K. Laury
This article tests whether the use of endogenous risk categorization by insurers enables consumers to make better-informed decisions even if they do not choose to purchase insurance. We do so by adding a simple insurance market to an experimental test of optimal (Bayesian) updating. In some sessions, no insurance is offered. In others, actuarially fair insurance prices are posted, and a subset of subjects is allowed to purchase this insurance. We find significant differences in the decision rules used depending on whether one observes insurance prices. Although the majority of choices correspond to Bayesian updating, the incidence of optimal decisions is higher in sessions with an insurance option. Most subjects given the option to purchase actuarially fair insurance choose to do so. However, fewer subjects purchase insurance when the probability of a loss is higher. [source]

When Can Politicians Scare Citizens Into Supporting Bad Policies?

AMERICAN JOURNAL OF POLITICAL SCIENCE, Issue 1 2009
Arthur Lupia
Many people claim that politicians use fear to manipulate citizens. Using a model, we examine how select attributes of fear affect a politician's ability to scare citizens into supporting policies that they would otherwise reject. In the model, the politician can alert citizens to the presence of a threat. But his claim need not be true. How citizens respond to this claim differs from most game-theoretic models. Our representation of this response follows from research in psychology, has distinct conscious and subconscious components, and does not presume efficient processing (i.e., Bayesian updating). Our conclusions counter popular claims about when politicians will use fear to manipulate citizens. They also highlight issues (abstract, distant) and leaders (secretive) for which recent empirical findings about how fear affects politics will,and will not,generalize to other cases. [source]

Reworking the NAFTA: Departures from Traditional Frameworks

CANADIAN JOURNAL OF AGRICULTURAL ECONOMICS, Issue 4 2001
Garth J. Holloway
This paper reviews the treatment of intellectual property rights in the North American Free Trade Agreement (NAFTA) and considers the welfare-theoretic bases for innovation transfer between member and nonmember states. Specifically, we consider the effects of new technology development from within the union and question whether it is efficient (in a welfare sense) to transfer that new technology to nonmember states. When the new technology contains stochastic components, the important issue of information exchange arises and we consider this question in a simple oligopoly model with Bayesian updating. In this context, it is natural to ask the optimal price at which such information should be transferred. Some simple, natural conjugate examples are used to motivate the key parameters upon which the answer is dependent. L'article que void analyse comment I' Accord de libre-échange nord-américain (ALENA) traite la protection de la propriété intellectuelle et s,attarde sur les principes théoriques du bien-Aêtre résultant du transfert de I' innovation entre etats membres et non membres. Plus précisément, I'auteur examine les consequences de I'élaboration d'une nouvelle technologie au sein de I'union économique et s'interroge sur I'efficacité (sous I'angle du bien-être social) du transfert de cette technologie aux états non membres. L'importante question du partage de l'information surgit dès que la nouvelle technologie inclut des elements stochastiques. L'auteur étudie cette question en prenant pour modèle un simple oligopole actualisé par la méthode bayesienne. Dans un tel contexte, il est naturel de réclamer le prix optimal auquel il devrait y avoir partage de I' information. Quelques exemples simples, à conjugué naturel, servent à faire ressortir les principaux paramètres sur lesquels repose la réponse è la question examinée. [source]