Please use this identifier to cite or link to this item: http://hdl.handle.net/10174/2257

Title: A rule for updating ambigous beliefs
Authors: Pires, Cesaltina
Keywords: Ambiguous beliefs
Bayesian updating
Uncertainty aversion
Multiple priors
Issue Date: 2002
Publisher: Kluwer Academic Publishers
Abstract: When preferences are such that there is no unique additive prior, the issue of which updating rule to use is of extreme importance. This paper presents an axiomatization of the rule which requires updating of all the priors by Bayes rule. The decision maker has conditional preferences over acts. It is assumed that preferences over acts conditional on eventE happening, do not depend on lotteries received on Ec, obey axioms which lead to maxmin expected utility representation with multiple priors, and have common induced preferences over lotteries. The paper shows that when all priors give positive probability to an event E, a certain coherence property between conditional and unconditional preferences is satisfied if and only if the set of subjective probability measures considered by the agent given E is obtained by updating all subjective prior probability measures using Bayes rule.
URI: http://hdl.handle.net/10174/2257
Type: article
Appears in Collections:CEFAGE - Publicações - Artigos em Revistas Internacionais Com Arbitragem Científica
GES - Publicações - Artigos em Revistas Internacionais Com Arbitragem Científica

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