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Learning under unawareness

Author

Listed:
  • Simon Grant

    (Australian National University)

  • Idione Meneghel

    (Australian National University)

  • Rabee Tourky

    (Australian National University)

Abstract

We propose a model of learning when experimentation is possible, but unawareness and ambiguity matter. In this model, complete lack of information regarding the underlying data generating process is expressed as a (maximal) family of priors. These priors yield posterior inferences that become more precise as more information becomes available. As information accumulates, however, the individual’s level of awareness as encoded in the state space may expand. Such newly learned states are initially seen as ambiguous, but as evidence accumulates there is a gradual reduction of ambiguity.

Suggested Citation

  • Simon Grant & Idione Meneghel & Rabee Tourky, 2022. "Learning under unawareness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(2), pages 447-475, September.
    • Handle: RePEc:spr:joecth:v:74:y:2022:i:2:d:10.1007_s00199-021-01408-y
    DOI: 10.1007/s00199-021-01408-y
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    References listed on IDEAS

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    Cited by:

    1. Chakravarty, Surajeet & Kelsey, David & Teitelbaum, Joshua C., 2022. "Reverse Bayesianism and act independence," Journal of Economic Theory, Elsevier, vol. 203(C).
    2. Burkhard C. Schipper, 2024. "Predicting the Unpredictable under Subjective Expected Utility," Papers 2403.01421, arXiv.org.

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    More about this item

    Keywords

    Learning; Unawareness; Ambiguity;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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