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Red herrings: Some thoughts on the meaning of zero-probability events and mathematical modeling

  • Karni, Edi

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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File URL: http://www.sciencedirect.com/science/article/B6V84-4Y5BM9C-1/2/76d60d5f08c76d856f821c9337fe0a2f
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 107 (2010)
Issue (Month): 2 (May)
Pages: 134-135

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Handle: RePEc:eee:ecolet:v:107:y:2010:i:2:p:134-135
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. 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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