Switching cost models as hypothesis tests

C-Tier
Journal: Economics Letters
Year: 2019
Volume: 175
Issue: C
Pages: 32-35

Score contribution per author:

0.201 = (α=2.01 / 5 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

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.

Technical Details

RePEc Handle
repec:eee:ecolet:v:175:y:2019:i:c:p:32-35
Journal Field
General
Author Count
5
Added to Database
2026-01-26