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Switching cost models as hypothesis tests
- Source :
- Economics Letters
- Publication Year :
- 2019
-
Abstract
- We relate models based on costs of switching beliefs (e.g., due to inattention) to hypothesis tests. Specifically, for an inference problem with a penalty for mistakes and for switching the inferred value, a band of inaction is optimal. We show this band is equivalent to a confidence interval, and therefore to a two-sided hypothesis test.
Details
- Database :
- OAIster
- Journal :
- Economics Letters
- Notes :
- en_AU
- Publication Type :
- Electronic Resource
- Accession number :
- edsoai.on1291848170
- Document Type :
- Electronic Resource