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arXiv · 2502.00958

Inertial Updating with General Information

Adam Dominiak·Matthew Kovach·Gerelt Tserenjigmid
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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.

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econ.TH

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Adam Dominiak, Matthew Kovach, Gerelt Tserenjigmid. 2025-02-02. Inertial Updating with General Information. https://arxiv.org/abs/2502.00958

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