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THE 2009 LAWRENCE R. KLEIN LECTURE: DIVERSIFIED TREATMENT UNDER AMBIGUITY *
Author(s) -
Manski Charles F.
Publication year - 2009
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2009.00558.x
Subject(s) - regret , ambiguity , theme (computing) , minimax , diversification (marketing strategy) , planner , welfare , mathematical economics , class (philosophy) , economics , psychology , mathematics , computer science , artificial intelligence , statistics , marketing , business , market economy , programming language , operating system
This article develops a broad theme about treatment under ambiguity through study of a particular decision criterion. The broad theme is that a planner may want to cope with ambiguity by diversification, assigning observationally identical persons to different treatments. Study of the minimax‐regret (MR) criterion substantiates the theme. The article significantly extends my earlier analysis of one‐period planning with an individualistic treatment and a linear welfare function. I show that MR treatment allocations are fractional in a large class of planning problems with nonlinear welfare functions, interacting treatments, learning, and noncooperative aspects.