Date:
-
Location:
B&E room 305
Chuck Manski from Northwestern will discuss:
Economists studying choice with partial knowledge typically assume that the decision maker places
a subjective distribution on unknown quantities and maximizes expected utility. Someone lacking
a subjective distribution faces a problem of choice under ambiguity. This article reviews recent
research on policy choice under ambiguity, when the task is to choose treatments for a population.
Ambiguity arises when a planner has partial knowledge of treatment response and does not feel able
to place a subjective distribution on the unknowns. I first discuss dominance and alternative criteria
for choice among undominated policies. I then illustrate with choice of a vaccination policy by a
planner who has partial knowledge of the effect of vaccination on illness. I next study a class of
problems where a planner may want to cope with ambiguity by diversification, assigning
observationally identical persons to different treatments. Lastly, I consider a setting where a planner
should not diversify treatment.