CSDE Winter 2025 Lecture

Jason Kerwin (UW) w/ Divya Pandey (Univ. of Minnesota)

Probabilistic risk beliefs are key drivers of economic and health decisions, but people are not always certain about their beliefs. We study these “impre-cise probabilities”, also known as ambiguous beliefs. Imprecision is measurable separately from the level of risk beliefs, and higher imprecision leads to more updating of beliefs in response to a randomized information treatment. New information also causes changes in imprecision levels. We can map our data onto both a standard Bayesian model and a version that is designed to handle imprecise probabilities; these models match some features of our data but not all of them. Imprecise probabilities have important implications for our understanding of decisionmaking and for the design of programs intended to change people’s minds.