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An Incomplete Ignorance State In Repeated-play Decision Making: A Note On Bayesian Decision-theoretical Framework

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Executive Summary

There have been much reported on decisions from experience, also referred to as decisions in a complete ignorance fashion. This note lays out a Bayesian decision-theoretical framework that provides a computable account for decisions from experience. To make the framework more tractable, this note sets up and examines decisions in an incomplete ignorance fashion. The current discussion asserts that well-known behavioral effects, such as the hot stove effect, and the Bayesian framework may lead to different predictions.

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