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 makers’ 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 Savage’s (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 The Center for the Study of Rationality, Hebrew University, Jerusalem in its series Discussion Paper Series with number dp444.
Length: 39 pages
Date of creation: Jan 2007
Date of revision:
Other versions of this item:
- Edi Karni, 2007. "Bayesian Decision Theory and the Representation of Beliefs," Levine's Bibliography 321307000000000776, UCLA Department of Economics.
- NEP-ALL-2007-01-23 (All new papers)
- NEP-HPE-2007-01-23 (History & Philosophy of Economics)
- NEP-UPT-2007-01-23 (Utility Models & Prospect Theory)
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- Sadowski, Philipp, 2008. "Conditional Preference for Flexibility: Eliciting Beliefs from Behavior," MPRA Paper 8614, University Library of Munich, Germany.
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