Ambiguity and the Bayesian Paradigm
AbstractThis is a survey of some of the recent decision-theoretic literature involving beliefs that cannot be quantified by a Bayesian prior. We discuss historical, philosophical, and axiomatic foundations of the Bayesian model, as well as of several alternative models recently proposed. The definition and comparison of ambiguity aversion and the updating of non-Bayesian beliefs are briefly discussed. Finally, several applications are mentioned to illustrate the way that ambiguity (or “Knightian uncertainty”) can change the way we think about economic problems.
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Bibliographic InfoPaper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 379.
Date of creation: 2011
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-12 (All new papers)
- NEP-CBA-2011-02-12 (Central Banking)
- NEP-HPE-2011-02-12 (History & Philosophy of Economics)
- NEP-UPT-2011-02-12 (Utility Models & Prospect Theory)
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Cahiers de recherche
2014-01, Universite de Montreal, Departement de sciences economiques.
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