Bayesian Decision Theory and the Representation of Beliefs
AbstractIn this paper, I present a Bayesian decision theory and define choice-based subjective probabilities that faithfully represent Bayesian decision makersâ prior and posterior beliefs regarding the likelihood of the possible effects contingent on his actions. I argue that no equivalent results can be obtained in Savageâs (1954) subjective expected utility theory and give an example illustrating the potential harm caused by ascribing to a decision maker subjective probabilities that do not represent his beliefs.
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Bibliographic InfoPaper provided by UCLA Department of Economics in its series Levine's Bibliography with number 321307000000000776.
Date of creation: 26 Jan 2007
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Other versions of this item:
- Edi Karni, 2007. "Bayesian Decision Theory and the Representation of Beliefs," Discussion Paper Series dp444, The Center for the Study of Rationality, Hebrew University, Jerusalem.
- NEP-ALL-2007-02-10 (All new papers)
- NEP-GTH-2007-02-10 (Game Theory)
- NEP-HPE-2007-02-10 (History & Philosophy of Economics)
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