Inertial Updating with General Information
Theoretical Economics
2025-02-04 v1
Abstract
We study belief revision when information is represented by a set of probability distributions, or general information. General information extends the standard event notion while including qualitative information (A is more likely than B), interval information (A has a ten-to-twenty percent chance), and more. We behaviorally characterize Inertial Updating: the decision maker's posterior is of minimal subjective distance from her prior, given the information constraint. Further, we introduce and characterize a notion of Bayesian updating for general information and show that Bayesian agents may disagree. We also behaviorally characterize f-divergences, the class of distances consistent with Bayesian updating.
Cite
@article{arxiv.2502.00958,
title = {Inertial Updating with General Information},
author = {Adam Dominiak and Matthew Kovach and Gerelt Tserenjigmid},
journal= {arXiv preprint arXiv:2502.00958},
year = {2025}
}