#  Andrew Little (Alesina Seminar) 

 



####  calendar\_today Date and Time 

 **October 17, 2024** 

 04:30PM - 05:45PM EDT 

####  pin\_drop Location 

 **CGIS Knafel room K354**  



 

 



 

 See the seminar's full schedule here: [Alberto Alesina Seminar on Political Economy](/program-political-economy)

###  **Today's Speaker**

 Andrew Little (UC Berkeley), "Model Uncertainty and Overprecision: Theory and Evidence" (with Ned Augenblick, Matthew Backus, and Don Moore)

###  **Abstract**

 Constructing beliefs about the political world (whether using formal statistical procedures or more generally) usually requires simplifying assumptions. Unfortunately, it is often cognitively costly or even impossible to consider how all possible assumptions would affect the relevant beliefs. We develop a formal model of individuals who properly recognize uncertainty conditional on the assumptions they make ("within-model uncertainty''), but do not fully appreciate how their assumptions affect their beliefs ("across-model uncertainty''). Our main result is that this leads to overprecision, in the sense of having too low a subjective variance relative to the truth and to the true mean square error of predictions. Making assumptions can also generate disagreement among those with the same information. Further, if assumptions are drawn independently from the correct distribution, the amount of disagreement is exactly equal to the amount of overprecision. We explore these predictions in an experimental setting where we can cleanly vary within-model and across-model uncertainty. Consistent with the theory, subjects respond approximately correctly to increases in within-model uncertainty, but mostly ignore across-model uncertainty. Finally, we analyze observational data from the Survey of Professional Forecasters, finding that forecasters are overprecise, and more overprecise in problems with more disagreement.

 *Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies*.

 Zoom links for the Alesina Seminar are distributed via the seminar's mailing list. You can [subscribe to the Alesina Seminar Mailing List](https://lists.iq.harvard.edu/mailman/listinfo/ppe_list) here.

 See the seminar's full schedule at the [Alesina Seminar page](/program-political-economy).

 All interested faculty and students are invited to attend.



 

 



 

 See also:- [ Workshops, Seminars & Classes ](/event-type/workshops-seminars-classes)
- [ Alesina Seminar on Political Economy ](/program/seminar-political-economy)
 
 

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