Fragility of asymptotic agreement under Bayesian learning. Issue 1 (1st February 2016)

• Record Type: Journal Article
• Authors: Acemoglu, Daron; Chernozhukov, Victor; Yildiz, Muhamet
• Is Part Of: Theoretical economics. Volume 11:Issue 1(2016:Jan.)
• Page Start: 187
• Page End: 225
• Publication Date: 2016-02-01
• Subjects: Asymptotic disagreement -- Bayesian learning -- merging of opinions; C11 -- C72 -- D83; Economics -- Periodicals; 330.01
• DOI: 10.3982/TE436
• Languages: English
• ISSNs: 1933-6837

Abstract

Abstract : Under the assumption that individuals know the conditional distributions of signals given the payoff‐relevant parameters, existing results conclude that as individuals observe infinitely many signals, their beliefs about the parameters will eventually merge. We first show that these results are fragile when individuals are uncertain about the signal distributions: given any such model, vanishingly small individual uncertainty about the signal distributions can lead to substantial (nonvanishing) differences in asymptotic beliefs. Under a uniform convergence assumption, we then characterize the conditions under which a small amount of uncertainty leads to significant asymptotic disagreement.