Abstract
A major concern with Bayesian decision making under uncertainty is the use of a single probability measure to quantify all relevant uncertainty. This paper studies prior robustness as a form of continuity of the value of a decision problem. I show that this notion of robustness is characterized by a form of stable choice over a sequence of perturbed decision problems, in which the available acts are perturbed in a precise fashion. I then introduce a choice-based measure of prior robustness and apply it to models of climate mitigation and portfolio choice.
Supplementary notes can be added here, including code and math.
Lorenzo Maria Stanca
Assistant Professor of Economics
Greetings! I hold concurrent appointments as an Assistant Professor at Collegio Carlo Alberto and within the Department of Economics, Social Studies, Applied Mathematics and Statistics (ESOMAS) at the University of Turin. My academic focus is centered on economic theory, with a particular emphasis on decision theory.