TY - JOUR
T1 - Updating Ambiguous Beliefs
AU - Gilboa, Itzhak
AU - Schmeidler, David
PY - 1993/2
Y1 - 1993/2
N2 - We present and axiomatize several update rules for probabilities (and preferences) where there is no unique additive prior. In the context of non-additive probabilities we define and axiomatize Bayesian update rules; in the context of multiple (additive) priors we define maximum likelihood rules. It turns out that for decision makers which can be described by both theories, the two approaches coincide. Thus, we suggest an axiomatically based ambiguous beliefs update rule, which is needed for applications in many economic theory models. Journal of Economic Literature classification numbers: D80, D81, C11, C71.
AB - We present and axiomatize several update rules for probabilities (and preferences) where there is no unique additive prior. In the context of non-additive probabilities we define and axiomatize Bayesian update rules; in the context of multiple (additive) priors we define maximum likelihood rules. It turns out that for decision makers which can be described by both theories, the two approaches coincide. Thus, we suggest an axiomatically based ambiguous beliefs update rule, which is needed for applications in many economic theory models. Journal of Economic Literature classification numbers: D80, D81, C11, C71.
UR - http://www.scopus.com/inward/record.url?scp=0002870714&partnerID=8YFLogxK
U2 - 10.1006/jeth.1993.1003
DO - 10.1006/jeth.1993.1003
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AN - SCOPUS:0002870714
SN - 0022-0531
VL - 59
SP - 33
EP - 49
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -