Econometrica: Jan 2021, Volume 89, Issue 1

A Practical Guide to Updating Beliefs from Contradictory Evidence

https://doi.org/10.3982/ECTA17378
p. 415-436

Evan Sadler

We often make high stakes choices based on complex information that we have no way to verify. Careful Bayesian reasoning—assessing every reason why a claim could be false or misleading—is not feasible, so we necessarily act on faith: we trust certain sources and treat claims as if they were direct observations of payoff relevant events. This creates a challenge when trusted sources conflict: Practically speaking, is there a principled way to update beliefs in response to contradictory claims? I propose a model of belief formation along with several updating axioms. An impossibility theorem shows there is no obvious best answer, while a representation theorem delineates the boundary of what is possible.



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