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Imprecise probabilistic beliefs as a context for decision-making under ambiguity

Listed author(s):
  • Nehring, Klaus

Coherent imprecise probabilistic beliefs are modeled as incomplete comparative likelihood relations admitting a multiple-prior representation. Under a structural assumption of Equidivisibility, we provide an axiomatization of such relations and show uniqueness of the representation. In the second part of the paper, we formulate a behaviorally general "Likelihood Compatibility" axiom relating preferences and probabilistic beliefs and characterize its implications for the class of "invariant biseparable" preferences that includes the MEU and CEU models among others.

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File URL: http://www.sciencedirect.com/science/article/pii/S0022-0531(08)00136-1
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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 144 (2009)
Issue (Month): 3 (May)
Pages: 1054-1091

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Handle: RePEc:eee:jetheo:v:144:y:2009:i:3:p:1054-1091
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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