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You won't harm me if you fool me

Echenique, Federico and Shmaya, Eran (2007) You won't harm me if you fool me. Social Science Working Paper, 1281. California Institute of Technology , Pasadena, CA. http://resolver.caltech.edu/CaltechAUTHORS:20101008-110010257

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Abstract

A decision maker faces a new theory of how certain events unfold over time. The theory matters for choices she needs to make, but possibly the theory is a fabrication. We show that there is a test which is guaranteed to pass a true theory, and which is also conservative: A false theory will only pass when adopting it over the decision maker’s initial theory would not cause substantial harm; if the agent is fooled she will not be harmed. We also study a society of conservative decision makers with different initial theories. We uncover pathological instances of our test: a society collectively rejects most theories, be they true or false. But we also find well-behaved instances of our test, collectively accepting true theories and rejecting false. Our tests builds on tests studied in the literature in the context of non-strategic inspectors.


Item Type:Report or Paper (Working Paper)
Additional Information:From author's copy: We thank Wojciech Olszewski for a comment on a previous draft. Echenique thanks the NSF for its support through award SES-0751980 and the Lee Center at Caltech.
Group:Social Science Working Papers
Funders:
Funding AgencyGrant Number
NSFSES-0751980
Lee Center at CaltechUNSPECIFIED
Subject Keywords:Conservatism, Merging of Opinions, Testing Experts, Non-manipulation
Classification Code:JEL classification numbers: C72,D83
Record Number:CaltechAUTHORS:20101008-110010257
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20101008-110010257
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:20356
Collection:CaltechAUTHORS
Deposited By: Shirley Johnson
Deposited On:08 Oct 2010 18:06
Last Modified:26 Dec 2012 12:31

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