PaperLink (coming soon)
We study underlying reasons for the failure of individuals to adhere to Bayes' rule and decompose this departure into three elements: (i) task complexity, (ii) information structure, and (iii) timing of information release. In a series of controlled experiments, we systematically alter all three elements and quantify their magnitude. We address task complexity by introducing a novel connection to nonlinear calculations required for Bayesian updating. We experimentally explore this link and find empirical support for it.
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