ICES Seminar in Experimental Economics and Game Theory
Assumptions, Disagreement, and Overprecision: Theory and Evidence
Friday, November 7, 2025 12:00 PM to 1:00 PM EST
Vernon Smith Hall (formerly Metropolitan Building), 5183
The ICES Seminar in Experimental Economics and Game Theory of the Fall 2025 semester will feature:
University of California, Berkeley
Assumptions, Disagreement, and Overprecision: Theory and Evidence
Abstract
Constructing beliefs about the world usually requires simplifying assumptions. We
analyze the beliefs of agents who make reasonable assumptions to model a complex situation and who make predictions conditional on those assumptions. Our theory identifies tight connections between model uncertainty (the extent to which different models lead to different predictions), overprecision (too-small variance estimates), and interpersonal disagreement (variance in mean predictions). We test these predictions in an experiment in which participants view a scatterplot and report mean and variance estimates for out of-sample predictions. Consistent with our theory, people appear to focus on one model but provide reasonable estimates of uncertainty conditional on that model. As a result, overprecision and disagreement increase with model uncertainty. We also find evidence consistent with our theory outside the lab using data from the Survey of Professional Forecasters.
For more information about the Seminar Series, please visit the Seminar Schedule homepage.
