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Coarse Bayesian Updating

Alexander Jakobsen

The Review of Economic Studies2026https://doi.org/10.1093/restud/rdag016article
FT50AJG 4*ABDC A*
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0.50

Abstract

Studies have shown that the standard law of belief updating—Bayes’ rule—is descriptively invalid in various settings. In this paper, I introduce and analyse a generalization of Bayes’ rule—Coarse Bayesian updating—accommodating much of the empirical evidence. I characterize the model axiomatically, show how it generates several well-known biases, and derive its main implications in static and dynamic settings. Each axiom expresses a property of Bayes’ rule but, conditional on the others, stops just short of making the agent fully Bayesian. The model employs standard primitives, making it suitable for applications; I demonstrate this by applying it to a standard setting of decision under risk, leading to a close relationship with the Blackwell information ordering and comparative measures of cognitive sophistication and bias.

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https://doi.org/https://doi.org/10.1093/restud/rdag016

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@article{alexander2026,
  title        = {{Coarse Bayesian Updating}},
  author       = {Alexander Jakobsen},
  journal      = {The Review of Economic Studies},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1093/restud/rdag016},
}

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Coarse Bayesian Updating

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0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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