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Mean And Variance Responsive Learning, Carlos Oyarzun, Rajiv Sarin
Mean And Variance Responsive Learning, Carlos Oyarzun, Rajiv Sarin
Carlos Oyarzun
A learning rule is variance-averse if the expected reduced-distribution of payoffs in the next period has a smaller variance than that of the current reduced-distribution, in every set where all the actions provide the same expected payoff. A learning rule is monotonically variance-averse if it is expected to add probability to the set of actions that have the smallest variance in the set, when all the actions have the same expected payoff. A learning rule is monotonically mean-variance-averse if it is expected to add probability to the set of actions that have the highest expected payoff and smallest variance whenever …