How Reasons Shape Priors and How Awareness Reshuffles Probabilities
ULB, Brussels, Belgium, December 10-11, 2025
We will bring together scholars from economics, management, psychology, and computer science in a constructive and hands-on atmosphere to make progress on understanding: How Reasons Shape Priors.
As Stephen Morris (1995: 227) has noted, it is essentially an “article of faith in economics” that “differences in beliefs among rational individuals must be explained by different information.” Any differences in expectations or beliefs must then be explained by private information only, a logic that still resonates in the resource based view of strategy.
While it seems uncontroversial that information is model-relative, and rational beliefs are thus a product of model and data, we hope to go a step further and explore the possibility that priors are shaped by reasons and theories. Theories, as sets of reasons, can be debated and contradicted by counter-theories. Thus, reasons alone can change priors and, in turn, beliefs. In this perspective, a good argument (even if unverifiable, as it logically links two events in the future) can, and should, rationally change the belief of a decision-maker about the future.
In the conference, we hope to explore questions like: If awareness grows, how should probabilities be reshuffled? Clearly, probability ratios are not preserved when agents listen to good counter-theories. This suggests we need modeling alternatives to “Reverse Bayesianism.” What could be fundamental principles of this new modeling approach?
More broadly, what are the consequences of the new foundations that we strive to find for understanding firm heterogeneity?
We also believe these questions are central to understanding the future of artificial intelligence. While large language models masterfully find and reiterate patterns in vast amounts of data, they appear to fail at unique counterfactual thinking based on abstract principles. Can insights into how reasons shape priors help us understand how human abstract reasoning and LLMs might be coupled to make predictions?
Schedule
December 10, 2025 (Solvay Brussels School Building, Room R42.2.103)
08:30 WELCOME COFFEE (Atrium)
09:00 Welcome: Oliver Witmeur (Vice-Dean of SBS-EM, ULB)
Session A; Rational Confidence as a Theory of Priors (Chair: Timo Ehrig)
09:15 Keynote 1: Todd Zenger (Utah) “Rational confidence”
10:00 Keynote 2: Scott Stern (MIT) “Theory-based origins of heterogenous priors for entrepreneurs”
10:45 Discussion: Timo Ehrig
11:00 COFFEE BREAK (Atrium)
Session B: Counter-Theories and Awareness Expansion (Chair: Mathias Dewatripont)
11:30 Keynote 3: Timo Ehrig (ULB) “Why counterfactual conditionals are central to understanding both heterogeneity and superior expectations”
12:15 Keynote 4: Burkhard Schipper (UC Davis) “Reasoning about business strategy under unknown unknowns”
13:00 Discussion: Mathias Dewatripont (ULB)
13:15 Jens Schmidt (Aalto) “A theory-based view of persuasion and disruption”
13:45 LUNCH (Atrium)
Session C: Modeling Frames: Bayes and Belief Revision (Chair: Luigi Marengo)
15:00 Keynote 5: Gabriele Kern-Isberner (TU Dortmund) “Rational reasoning and belief revision based on conditionals”
15:45 Discussion: Luigi Marengo (LUISS)
16:00 COFFEE BREAK
16:30 Nicholas Melhuish (Oxford) “Confidence Type 2 decision making in public equity, at the board level and in private markets”
16:45 Christian Zehnder (Lausanne) “Belief revision and cooperation in volatile environments”
17:00 Madison Singell (Stanford) “Even when inaccurate, simple theories find better strategies”
17:15 Teppo Felin (Utah) “Mindful economic activity”
17:45 Luigi Marengo (LUISS) “Theory guided search in complex landscapes”
December 11, 2025
08:30 WELCOME COFFEE (Atrium)
Session D: Strategic Factor Markets and Competitive Advantage: A 21st-Century Update (Chair: Todd Zenger)
09:00 Keynote 6: Jay Barney (Utah) “Where does heterogeneity come from?”
09:45 Keynote 7: Mathias Dewatripont (Brussels) “Potential insights from the economics of science and innovation for the theory-based-view of strategy”
10:30 Arnaldo Camuffo (Bocconi) “Optimal theory selection: a multi-arm bandit approach”
11:00 Elena Novelli (Bayes) “Experiments, learning and strategy”
11:30 COFFEE BREAK (Atrium)
Session E: Implications for Understanding Strategy and Organizations (Chair: Olav Sorenson)
12:00 Keynote 8: Robert Gibbons (MIT) “Framing and back-propagation in building decentralized coordination”
12:45 Burkhard Schipper (UC Davis) “Biform games with unawareness”
13:00 Discussion and concluding remarks: Olav Sorenson (UCLA)
13:30 LUNCH (Atrium)
Organizers
Mathias Dewatripont
Timo Ehrig
Todd Zenger