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D@FC46D =625D @442D:@?2==J E@ DF3@AE:>2= 564:D:@?D 3642FD6 564:D:@?>2<6CD
42??@E 56E6C>:?6 H96? E96 2AA=:42E:@? @7 E96 CF=6 :D 256BF2E6 2?5 H96?
?@E
C<6D 2?5 JE@? 2C8F6 E92E E9:D :D 2? :>A@CE2?E C62D@? H9J
9F>2?D 4@>>:E E96 @?4@C56 72==24J
-96J 2=D@ 4:E6 6G:56?46 E92E E96 @?=J
6IA6C:>6?E2= DF3;64ED C6A@CE65 E@ 3692G6 >@C6 C2E:@?2==J 2C6 49:=5C6? 36=@H
E96 286 @7 C<6D 2?5 JE@? Q E9FD :E D66>D E92E H6 E6249
@FC 49:=5C6? E@ 364@>6 :CC2E:@?2= 2?5 E@ 4@>>:E E96 @?4@C56 72==24J
=E9@F89 AC@323=J 2== E9C66 2?5 A6C92AD 6G6? >@C6 ADJ49@=@8:42= 6I
A=2?2E:@?D 2C6 :>A@CE2?E E96 2C8F>6?ED AC6D6?E65 96C6 2C6 >@DE 4=@D6=J
C6=2E65 E@ E96 =62C?:?8 2C8F>6?E :? E96 @G6C86?6C2=:K2E:@? 9JA@E96D:D
#? 4@?EC2DE E@ E96 C6DF=ED C6A@CE65 3J C<6D 2?5 JE@? %=24KJ?D<: 2?5 @E
EC6== L?5 E92E 2=D@ J@F?8 49:=5C6? 4@>>:E E96 @?4@C56 72==24J
&(" #&' $%# !
,F?< 4@DE AC@3=6>D @44FC :? 5J?2>:4 564:D:@? AC@3=6>D @?=J
56A:4ED E96 >:?:>F> DECF4EFC6 @7 DF49 2 AC@3=6>
Initial
decision
Signal
:8FC6 Follow-up
decision
:8FC6 -:>6 ,ECF4EFC6 @7 2 ,F?< @DE *C@3=6>
-96C6 2C6 2E =62DE EH@ 4@?D64FE:G6 :?E6CC6=2E65 564:D:@? AC@3=6>D
-96
:?:E:2= 564:D:@? :?G@=G6D @AE:@?D E92E :? D@>6 D6?D6 2C6 2DD@4:2E65 H:E9 @A
E:@?D @7 E96 7@==@HFA 564:D:@?
)?6 EJA:42= 6I2>A=6 :D E92E E96 :?:E:2= 56
4:D:@? :D 2 AC@;64E 49@:46 H9:=6 E96 D64@?5 C682C5D H96E96C E@ 4@?E:?F6 @C
6IA2?5 E96 AC@;64E @C E@ 232?5@? :E
#?36EH66? E96 :?:E:2= 564:D:@? 2?5 E96
7@==@HFA 564:D:@? E96C6 :D D@>6 A2J@SC6=6G2?E D:8?2= 23@FE E96 DE2E6 @7 E96
H@C=5
? @AE:>2= 7@==@HFA 564:D:@? H:== 36 4@?5:E:@?65 FA@? E9:D D:8?2=
@>>:EE:?8 E96 @?4@C56 72==24J >62?D :8?@C:?8 E96 D:8?2= 2?5 D6=64E:?8
E96 P2DD@4:2E65 @AE:@?P :? 2?J 6G6?E
-9:D A2A6C E96C67@C6 7@4FD6D @? E96 >@DE D:>A=6 7@C> @7 DF49 2 AC@3=6>
:?G@=G:?8 EH@ @AE:@? 2E 6249 @7 E96 EH@ 564:D:@? A@:?ED 2?5 EH@ 5:S6C6?E
DE2E6D @7 E96 H@C=5
,F49 2 564:D:@? AC@3=6> :D 56A:4E65 :? :8FC6 H96C6
2?5 56?@E6 E96 :?:E:2= 564:D:@?D 2?5 56?@E6 E96 EH@ DE2E6D @7 E96
H@C=5 2?5 2?5 56?@E6 E96 7@==@HFA 564:D:@?
64:D:@?D 2?5
D92== 36 C682C565 2D 2DD@4:2E65
92AA6?D H:E9 AC@323:=:EJ 2?5 92AA6?D H:E9 AC@323:=:EJ -96 DE2E6 @7 E96 H@C=5 :D @3D6CG65
367@C6 >2<:?8 E96 7@==@HFA 564:D:@?
Initial
decision
State of
the
world
θA
IA
θB
θA
IB
θB
Follow-up
decision
iA
A
iB
iA
D
iB
C
D
iA
C
iB
iA
D
D
iB
:8FC6 *2J@S ,ECF4EFC6
B
-9C@F89@FE H6 2DDF>6
DDF>AE:@? :>A=:6D E92E :E :D D@>6E:>6D ?@E @AE:>2= E@ E2<6 E96 2DD@
4:2E65 564:D:@?
#7 E96 564:D:@?>2<6C 92D 49@D6? 2?5 E96 @E96C
DE2E6 @7 E96 H@C=5 @44FCD :E :D 36EE6C E@ DH:E49 E@ 9@@D
:?8 E96 2DD@4:2E65 24E:@? :D :?E6CAC6E65 2D 4@>>:EE:?8 E96 @?4@C56
72==24J
DDF>AE:@? :>A=:6D E92E :D E96 @AE:>2= DE286 @?6 564:D:@? AC@
G:565 2? @AE:>2= DE286 EH@ 564:D:@?
DDF>:?8 2? @AE:>2= 7@==@HFA 564:
D:@? E96 A2J@SD 42? 36 C6AC6D6?E65 :? 2 C65F465 A2J@S >2EC:I
'! ! 0! "*-( +4*7 (/-%3
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6?G:C@?>6?ED
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3@E9 42D6D
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J@F 42? 6:E96C D6== 366C @C F>3C6==2D
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E96C67@C6 C676CD E@ E96 LCDE DE286 @?=J
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8
growth rate
7,5
7
6,5
6
5,5
no concorde fallacy
concorde fallacy
5
4,5
0
0,5
1
1,5
2
time
:8FC6 :@=@8:42= G@=FE:@? 2?5 E96 @?4@C56 2==24J
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0
5
10
15
time
20
0
-0.125
-0.25
-0.375
-0.5
-0.625
u tility
:8FC6 IA64E65 FE:=:E:6D @G6C E:>6
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utility difference
0.06
0.04
0.02
0
0
5
10
15
20
time
-0.02
:8FC6 :S6C6?46 :? IA64E65 .E:=:E:6D
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