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An incomplete ignorance state in repeated-play decision making: A note on Bayesian decision-theoretical framework

Kobayashi, Yohei and Fujikawa, Takemi (2010): An incomplete ignorance state in repeated-play decision making: A note on Bayesian decision-theoretical framework.

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Abstract

There has been much reported on decisions from experience, also referred to as decisions in a complete ignorance fashion. This note lays out a Bayesian decision-theoretical framework that provides a computable account for decisions from experience. To make the framework more tractable, this note sets up and examines decisions in a incomplete ignorance fashion. The current discussion asserts that well-known behavioural effects, such as the hot stove effect, and the Bayesian framework may lead to different predictions.

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