Choosing treatment policies under ambiguity

Charles F. Manski*

*Corresponding author for this work

Research output: Contribution to journalReview articlepeer-review

22 Scopus citations

Abstract

Economists studying choice with partial knowledge typically assume that the decision maker places a subjective distribution on unknown quantities and maximizes expected utility. Someone lacking a subjective distribution faces a problem of choice under ambiguity. This article reviews recent research on policy choice under ambiguity, when the task is to choose treatments for a population. Ambiguity arises when a planner has partial knowledge of treatment response and does not feel able to place a subjective distribution on the unknowns. I first discuss dominance and alternative criteria for choice among undominated policies. I then illustrate with the choice of a vaccination policy by a planner who has partial knowledge of the effect of vaccination on illness. I next study a class of problems in which a planner may want to cope with ambiguity by diversification, assigning observationally identical persons to different treatments. Lastly, I consider a setting in which a planner should not diversify treatment.

Original languageEnglish (US)
Pages (from-to)25-49
Number of pages25
JournalAnnual Review of Economics
Volume3
DOIs
StatePublished - 2011

Keywords

  • Dominance
  • Minimax regret
  • Partial identification
  • Planning
  • Social choice
  • Treatment response

ASJC Scopus subject areas

  • Economics and Econometrics

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