TEC Seminar: Gerelt Tserenjigmid, University of California, Santa Cruz

Speaker

Gerelt Tserenjigmid, University of California, Santa Cruz

Biography

I am an associate professor of economics at UC Santa Cruz.  I am an economic theorist, and most of my research is in decision theory, behavioral economics, and revealed preference theory. Prior to joining UCSC, I was an assistant professor of economics at Virginia Tech. 

Title

"Inertial Updating"

Abstract

We introduce and characterize inertial updating of beliefs. Under inertial updating, a decision maker (DM) chooses a belief that minimizes the subjective distance between their prior belief and the set of beliefs consistent with the observed event. Importantly, by varying the subjective notion of distance, inertial updating provides a unifying framework that nests three different types of belief updating: (i) Bayesian updating, (ii) non-Bayesian updating rules, and (iii) updating rules for events with zero probability, including the conditional probability system (CPS) of Myerson (1986). We demonstrate that our model is behaviorally equivalent to the Hypothesis Testing model (HT) of Ortoleva (2012), clarifying the connection between HT and CPS and non-Bayesian updating models.  We apply our model to a persuasion game.