Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2013

Font Size:  Small  Medium  Large

Probabilistic Sophistication and Reverse Bayesianism

Edi Karni, Marie-Louise Viero*

Last modified: 2013-04-15

Abstract


This paper extends our earlier work on reverse Bayesianism by relaxing the assumption that decision makers abide by expected utility theory, assuming instead weaker axioms that merely imply that they are probabilistically sophisticated. We show that our main results, namely, (modified) representation theorems and corresponding rules for updating beliefs over expanding state spaces and null events that constitute "reverse Bayesianism," remain valid.

Full Text: PDF