Economic Theory

, Volume 50, Issue 3, pp 765–786 | Cite as

Updating toward the signal

  • Christopher P. ChambersEmail author
  • Paul J. Healy
Open Access
Research Article


Modelers frequently assume (either implicitly or explicitly) that an agent’s posterior expectation of some variable lies between their prior mean and the realization of an unbiased signal of that variable. We call this property updating toward the signal (UTS). We show that if the prior and signal error densities are both symmetric and quasiconcave then UTS will occur. If, for a given prior, UTS occurs for all symmetric and quasiconcave error densities, then in fact the prior must be symmetric and quasiconcave. Similar characterizations are derived for two additional updating requirements that are strictly weaker than UTS.


Signal extraction Bayes’s rule Reversion to the mean Posterior beliefs Bayesian robustness 

JEL Classification

C11 D01 D81 D83 D84 


Open Access

This article is distributed under the terms of the Creative Commons Attribution Noncommercial License which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.


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Copyright information

© The Author(s) 2010

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of California, San DiegoLa Jolla, San DiegoUSA
  2. 2.Department of EconomicsThe Ohio State UniversityColumbusUSA

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