Red herrings: Some thoughts on the meaning of zero-probability events and mathematical modeling
Kicking off the discussion following Savage's presentation at the 1952 Paris colloquium, Arrow raised what he considered to be a difficulty with the intuitive interpretation of Savage's theorem. It suggests that decision makers strictly prefer betting on an event of measure zero over betting on a proper subset of that event. Within the realm of the revealed-preference methodology and limited verifiability, Arrow's difficulty is a red herring: the problem he poses has its origin in the technical aspects of Savage's model and not in its substantive aspect.
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- Blume, Lawrence & Brandenburger, Adam & Dekel, Eddie, 1991.
"Lexicographic Probabilities and Choice under Uncertainty,"
Econometric Society, vol. 59(1), pages 61-79, January.
- Lawrence Blume & Adam Brandenburger & Eddie Dekel, 2014. "Lexicographic Probabilities and Choice Under Uncertainty," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 6, pages 137-160 World Scientific Publishing Co. Pte. Ltd..
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