I study individuals who use statistical models to draw secure or robust inferences from iid data. The main contribution of the paper is a steady-state model in which distinct statistical models are consistent with empirical evidence, even as data increases without bound. Individuals may hold different beliefs and interpret their environment differently even though they know each other's statistical model and base their inferences on identical data. The behavior modeled here is that of rational individuals confronting an environment in which learning is hard, rather than ones beset by cognitive limitations or behavioral biases.

SLIDES:

UIUC talk, April 2008