A Practical Guide to Updating Beliefs From Contradictory Evidence

Abstract

We often make high stakes choices based on complex information that we have no way to verify. Careful Bayesian reasoning---assessing every reason why a claim could be false or misleading---is not feasible, so we necessarily act on faith: we trust certain sources and treat claims as if they were direct observations of payoff relevant events. This creates a challenge when trusted sources conflict: Practically speaking, is there a principled way to update beliefs in response to contradictory claims? I propose a model of belief formation along with several updating axioms. An impossibility theorem shows there is no obvious best answer, while a representation theorem delineates the boundary of what is possible.

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