Optimal Regulation of Research and Development under Imperfect Information

Observational learning under imperfect information

The analysis explores Bayes-rational sequential decision making in a game with pure information externalities, where each decision maker observes only her predecessor’s binary action. Under perfect information the martingale property of the stochastic learning process is used to establish convergence of beliefs and actions. Under imperfect information, in contrast, beliefs and actions cycle for...

Imperfect Information and Optimal Monetary Policy

Should the central bank care whether slow adjustment of the price level is due to adjustment costs as in the standard New Keynesian model or due to imperfect information? Most of the analysis of optimal monetary policy is conducted in the Calvo model. This paper studies optimal monetary policy in a model with exogenous dispersed information and in a rational inattention model. JEL: E3, E5, D8.

Optimal maintenance decisions under imperfect inspection

The process industry is increasingly making use of Risk Based Inspection (RBI) techniques to develop cost and/or safety optimal inspection plans. This paper proposes an adaptive Bayesian decision model to determine these optimal inspection plans under uncertain deterioration. It uses the gamma stochastic process to model the corrosion damage mechanism and Bayes’ theorem to update prior knowledg...

Modeling of Decision Maker Under Imperfect Information

In real-life, imperfect information is commonly present in all the components of the decision making problem. In decision making problems a DM is almost never provided with perfect, that is ideal decision relevant information to determine states of nature, outcomes, probabilities, etc. We are known that, relevant information almost always comes imperfect. Imperfect information is information wh...

Unconscionability and Imperfect Information: A Research Agenda