Al-Najjar, Nabil and Pomatto, Luciano and Sandroni, Alvaro (2014) Claim Validation. American Economic Review, 104 (11). pp. 3725-3736. ISSN 0002-8282. http://resolver.caltech.edu/CaltechAUTHORS:20190405-093152329
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Abstract
Hume (1748) challenged the idea that a general claim (e.g. "all swans are white") can be validated by empirical evidence, no matter how compelling. We examine this issue from the perspective of a tester who must accept or reject the forecasts of a potential expert. If experts can be skeptical about the validity of claims then they can strategically evade rejection. In contrast, if experts are required to conclude that claims backed by sufficient evidence are likely to be true, then they can be tested and rejected. These results provide an economic rationale for claim validation based on incentive problems.
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| Additional Information: | © 2014 American Economic Association. We thank three anonymous referees for many useful suggestions. We also thank Wojciech Olszewski, Eran Shmaya, Marciano Siniscalchi, and Rakesh Vohra for useful discussions, and seminar audiences at the Canadian Economic Theory Conference 2012, the Fifth Transatlantic Theory Workshop, the Summer meeting of the Econometric Society 2012, XIII Latin American Workshop in Economic Theory, Jolate conference in Bogota, and the Washington University seminar series. Sandroni gratefully acknowledges financial support from the National Science Foundation. All errors are ours. | ||||||
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| Classification Code: | JEL: D82 Asymmetric and Private Information; Mechanism Design | ||||||
| Record Number: | CaltechAUTHORS:20190405-093152329 | ||||||
| Persistent URL: | http://resolver.caltech.edu/CaltechAUTHORS:20190405-093152329 | ||||||
| Official Citation: | Al-Najjar, Nabil, Luciano Pomatto, and Alvaro Sandroni. 2014. "Claim Validation." American Economic Review, 104 (11): 3725-36. DOI: 10.1257/aer.104.11.3725 | ||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | ||||||
| ID Code: | 94494 | ||||||
| Collection: | CaltechAUTHORS | ||||||
| Deposited By: | Tony Diaz | ||||||
| Deposited On: | 05 Apr 2019 16:40 | ||||||
| Last Modified: | 05 Apr 2019 16:40 |
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