Reexamination on Updating Choquet Beliefs
AbstractEichberger, Grant, and Kelsey (2007) characterize the full Bayesian update rule for capacities. This paper shows that a conditional preference relation represented by the Choquet expected utility with respect to the updated capacity through the rule does not satisfy the axiom of Conditional Certainty Equivalence Consistency. A counterexample is provided and it is proved that a relaxation of the axiom maintains their results.
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Bibliographic InfoPaper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 643.
Date of creation: Nov 2007
Date of revision:
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More information through EDIRC
Bayesian update; capacity; conditional preference; Choquet expected utility;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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- Ghirardato, Paolo & Marinacci, Massimo, 2000.
"Risk, Ambigity and the Separation of Utility and Beliefs,"
1085, California Institute of Technology, Division of the Humanities and Social Sciences.
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- Jurgen Eichberger & Simon Grant & David Kelsey, 2006.
"Updating Choquet Beliefs,"
0607, Exeter University, Department of Economics.
- Cesaltina Pacheco Pires, 2002. "A Rule For Updating Ambiguous Beliefs," Theory and Decision, Springer, vol. 53(2), pages 137-152, September.
- Dominiak, Adam & Eichberger, Jürgen & Lefort, Jean-Philippe, 2012. "Agreeable trade with optimism and pessimism," Mathematical Social Sciences, Elsevier, vol. 64(2), pages 119-126.
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