• Corpus ID: 40499048

Ambiguity in the Context of Probabilistic Beliefs

```@inproceedings{Nehring2001AmbiguityIT,
title={Ambiguity in the Context of Probabilistic Beliefs},
author={Klaus Nehring},
year={2001}
}```
When are a decision maker's preferences compatible with speci ed probabilistic beliefs? We propose two de nitions of \compatibility" as possible answers to this question. The weaker one requires simply that the decision maker prefer to bet on an event whenever it is more likely. It is shown that under regularity conditions there exists a unique (incomplete) maximal comparative likelihood relation such that a given preference ordering is compatible with it. This relation yields a model-free…

Relevance and Symmetry

• Economics
• 2011
We define a behavioral concept of relevance in the context of decision making under uncertainty. We argue that this concept provides a sensible answer to the question "What probabilistic environments

Decision-Making in the Context of Imprecise Probabilistic Beliefs

Coherent imprecise probabilistic beliefs are modelled as incomplete comparative likelihood relations admitting a multiple-prior representation. Under a structural assumption of Equidivisibility, we

Bernoulli Without Bayes: A Theory of Utility-Sophisticated Preferences under Ambiguity

A decision-maker is utility-sophisticated if he ranks acts according to their expected utility whenever such comparisons are meaningful. We characterize utility sophistication in cases in which

Ambiguity from the Differential Viewpoint

• Economics, Computer Science
• 2002
Given the notion of ambiguity, it is shown that preferences can be represented so as to provide an intuitive representation of ambiguity attitudes, and an axiomatic characterization of the "alfa"-MEU decision rule is presented.

Toward a Rational-Choice Foundation of Non-Additive Theories

A classical argument of de Finetti holds that Rationality implies Subjective Expected Utility (SEU). In contrast, the Knightian distinction between Risk and Ambiguity suggests that a rational

The Likelihood Method for Decision under Uncertainty

• Economics
• 2005
This paper introduces the likelihood method for decision under uncertainty. The method allows the quantitative determination of subjective beliefs or decision weights without invoking additional

Objective Imprecise Probabilistic Information, Second Order Beliefs and Ambiguity Aversion: an Axiomatization

A model of decision under objective ambiguity described by multiple probability distributions is axiomatized and shows that ambiguity aversion like the one revealed by the Ellsberg paradox requires that second order beliefs be nonadditive.

References

SHOWING 1-10 OF 37 REFERENCES

A Theory of Rational Choice under Ignorance

This paper contributes to a theory of rational choice for decision-makers with incomplete preferences due to partial ignorance, whose beliefs are representable as sets of acceptable priors. We focus

A More Robust Definition of Subjective Probability

• Economics
• 1992
Although their goal is to separate a decision maker's underlying beliefs (their subjective probabilities of events) from their preferences (their attitudes toward risk), classic choice-theoretic

Risk, Ambiguity, and the Separation of Utility and Beliefs

• Economics
Math. Oper. Res.
• 2001
A general model of static choice under uncertainty, arguably the weakest model achieving a separation of cardinal utility and a unique representation of beliefs is introduced, which can be very helpful in the characterization of a notion of ambiguity aversion.

Stochastically independent randomization and uncertainty aversion

Summary. This paper proposes a preference-based condition for stochastic independence of a randomizing device in a product state space. This condition is applied to investigate some classes of

Subjective Probabilities on Subjectively Unambiguous Events

• Economics
• 1999
This paper suggests a behavioral definition of (subjective) ambiguity in an abstract setting where objects of choice are Savage-style acts. Then axioms are described that deliver probabilistic

A SIMPLE AXIOMATIZATION OF NONADDITIVE EXPECTED UTILITY

• Economics
• 1992
This paper provides an extension of L. J. Savage's subjective expected utility theory for decisions under uncertainty. It includes in the set of events both unambiguous events for which probabilities

Ambiguity Made Precise: A Comparative Foundation

• Economics
J. Econ. Theory
• 2002
Ellsberg (1961)'s famous thought experiment shows that SEU cannot take into account the possibility that the information a decision maker has about some uncertain event be vague or imprecise, and that such "ambiguity" might affect her behavior.

Characterizing uncertainty aversion through preference for mixtures

This paper provides a characterization for two leading representations of uncertainty averse preferences; those of Schmeidler [24] (Choquet expected utility or CEU) and of Gilboa and SchmeIDler [16] (maxmin expected utility with a non-unique prior or MMEU).

ON THE INTERPRETATION OF SARIN AND WAKKER'S "A SIMPLE AXIOMATIZATION OF NONADDITIVE EXPECTED UTILITY"

IN AN INTERESTING RECENT PAPER, Sarin and Wakker (1992) (henceforth S-W) have provided a new axiomatization of expected utility maximization with "capacities" (CEU). Its simplicity is attractive in