Making Decisions under Model Misspecification
We use decision theory to confront uncertainty that is sufficiently broad to incorporate “models as approximations.” We presume the existence of a featured collection of what we call “structured models” that have explicit substantive motivations. The decision maker confronts uncertainty through the lens of these models, but also views these models as simplifications, and hence, as misspecified. We extend the max-min analysis under model ambiguity to incorporate the uncertainty induced by acknowledging that the models used in decision-making are simplified approximations. Formally, we provide an axiomatic rationale for a decision criterion that incorporates model misspecification concerns.
Date:
18 November 2022, 14:15 (Friday, 6th week, Michaelmas 2022)
Venue:
Manor Road Building, Manor Road OX1 3UQ
Venue Details:
Online only: https://zoom.us/j/93867615769?pwd=VmRJVVRkYlhUajllTEJyd2NsTUs3QT09 Passcode: 494196
Speaker:
Simone Cerreia-Vioglio (Bocconi University)
Organising department:
Department of Economics
Part of:
Nuffield Economic Theory Seminar
Booking required?:
Not required
Audience:
Members of the University only
Editors:
Melis Clark,
Emma Heritage
