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http://hdl.handle.net/10419/64719
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| Title: | | Adaptive partial policy innovation: Coping with ambiguity through diversification  |
| Authors: | | Manski, Charles F. |
| Issue Date: | | 2008 |
| Series/Report no.: | | cemmap working paper CWP10/08 |
| Abstract: | | This paper develops a broad theme about policy choice under ambiguity through study of a particular decision criterion. The broad theme is that, where feasible, choice between a status quo policy and an innovation is better framed as selection of a treatment allocation than as a binary decision. Study of the static minimax-regret criterion and its adaptive extension substantiate the theme. When the optimal policy is ambiguous, the static minimax-regret allocation always is fractional absent large fixed costs or deontological considerations. In dynamic choice problems, the adaptive minimax-regret criterion treats each cohort as well as possible, given the knowledge available at the time, and maximizes intertemporal learning about treatment response. |
| JEL: | | D7 H0 |
| Persistent Identifier of the first edition: | | doi:10.1920/wp.cem.2008.1008 |
| Document Type: | | Working Paper |
| Appears in Collections: | | cemmap working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies (IFS)
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