"Reverse Bayesianism": A Choice-Based Theory of Growing Awareness
AbstractThis paper introduces a new approach to modeling the expanding universe of decision makers in the wake of growing awareness, and invokes the axiomatic approach to model the evolution of decision makers' beliefs as awareness grows. The expanding universe is accompanied by extension of the set of acts, the preference relations over which are linked by a new axiom, invariant risk preferences, asserting that the ranking of lotteries is independent of the set of acts under consideration. The main results are representation theorems and rules for updating beliefs over expanding state spaces and null events that have the flavor of "reverse Bayesianism."
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 1258.
Length: 26 pages
Date of creation: Dec 2010
Date of revision:
Publication status: Forthcoming in American Economic Review
Awareness; unawareness; reverse Bayesianism; null events;
Other versions of this item:
- Edi Karni & Marie-Louise Vier?, 2013. ""Reverse Bayesianism": A Choice-Based Theory of Growing Awareness," American Economic Review, American Economic Association, vol. 103(7), pages 2790-2810, December.
- Edi Karni & Marie-Louise Vier�, 2012. ""Reverse Bayesianism": A Choice-Based Theory of Growing Awareness," Economics Working Paper Archive 591, The Johns Hopkins University,Department of Economics.
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-30 (All new papers)
- NEP-MIC-2011-01-30 (Microeconomics)
- NEP-UPT-2011-01-30 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Grant, Simon & Quiggin, John, 2012.
"Inductive Reasoning About Unwareness,"
Risk and Sustainable Management Group Working Papers
151202, University of Queensland, School of Economics.
- Grant, Simon & Quiggin, John, 2009. "Inductive Reasoning About Unwareness," Risk and Sustainable Management Group Working Papers 151188, University of Queensland, School of Economics.
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Game Theory and Information
- Li, Jing, 2009. "Information structures with unawareness," Journal of Economic Theory, Elsevier, vol. 144(3), pages 977-993, May.
- Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2005.
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
52, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Halpern, Joseph Y. & Rego, Leandro Chaves, 2008. "Interactive unawareness revisited," Games and Economic Behavior, Elsevier, vol. 62(1), pages 232-262, January.
- Modica, Salvatore & Rustichini, Aldo, 1999. "Unawareness and Partitional Information Structures," Games and Economic Behavior, Elsevier, vol. 27(2), pages 265-298, May.
- Oliver Walker & Simon Dietz, 2011. "A representation result for choice under conscious unawareness," Grantham Research Institute on Climate Change and the Environment Working Papers 59, Grantham Research Institute on Climate Change and the Environment.
- Oliver Walker, 2011. "Unawareness with ‘possible’ possible worlds," Grantham Research Institute on Climate Change and the Environment Working Papers 69, Grantham Research Institute on Climate Change and the Environment.
- Faro, José Heleno & Lefort, Jean Philippe, 2013. "Dynamic Objective and Subjective Rationality," Insper Working Papers wpe_312, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
- Quiggin, John, 2013. "The value of information and the value of awareness," Risk and Sustainable Management Group Working Papers 151207, University of Queensland, School of Economics.
- Heinsalu, Sander, 2014. "Universal type structures with unawareness," Games and Economic Behavior, Elsevier, vol. 83(C), pages 255-266.
- Edi Karni & Marie-Louise VierÃ¸, 2014. "Awareness of Unawareness: A Theory of Decision Making in the Face of Ignorance," Working Papers 1322, Queen's University, Department of Economics.
- Auster, Sarah, 2013. "Asymmetric awareness and moral hazard," Games and Economic Behavior, Elsevier, vol. 82(C), pages 503-521.
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