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Neo-additive capacities and updating

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  • Eichberger, Jürgen
  • Grant, Simon
  • Lefort, Jean-Philippe

Abstract

This paper shows that, for CEU preferences, the axioms consquentialism, state independence and conditional certainty equivalent consistency under updating characterise a family of capacities, called Genralised Neo-Additive Capacities (GNAC). This family contains as special cases among others neo-additive capacities as introduced by Chateauneuf, Eichberger, and Grant(2007), Hurwicz capacities, and ε-contaminations. Moreover, we will show that the convex version of a GNAC is the only capacity for which the core of the Full-Bayesian Updates of a capacity, introduced by Jaffray (1992), equals the set of Bayesian updates of the probability distributions in the core of the original capacity.

Suggested Citation

  • Eichberger, Jürgen & Grant, Simon & Lefort, Jean-Philippe, 2009. "Neo-additive capacities and updating," Working Papers 0490, University of Heidelberg, Department of Economics.
  • Handle: RePEc:awi:wpaper:0490 Note: This paper is part of http://archiv.ub.uni-heidelberg.de/volltextserver/view/schriftenreihen/sr-3.html
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    References listed on IDEAS

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    1. Gilboa Itzhak & Schmeidler David, 1993. "Updating Ambiguous Beliefs," Journal of Economic Theory, Elsevier, vol. 59(1), pages 33-49, February.
    2. Jürgen Eichberger & David Kelsey & Burkhard C. Schipper, 2009. "Ambiguity and social interaction," Oxford Economic Papers, Oxford University Press, pages 355-379.
    3. Duersch, Peter & Oechssler, Jörg & Vadovic, Radovan, 2012. "Sick pay provision in experimental labor markets," European Economic Review, Elsevier, vol. 56(1), pages 1-19.
    4. Wakker, Peter P, 2001. "Testing and Characterizing Properties of Nonadditive Measures through Violations of the Sure-Thing Principle," Econometrica, Econometric Society, vol. 69(4), pages 1039-1059, July.
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    10. Eichberger, Jurgen & Grant, Simon & Kelsey, David, 2007. "Updating Choquet beliefs," Journal of Mathematical Economics, Elsevier, vol. 43(7-8), pages 888-899, September.
    11. Epstein Larry G. & Le Breton Michel, 1993. "Dynamically Consistent Beliefs Must Be Bayesian," Journal of Economic Theory, Elsevier, vol. 61(1), pages 1-22, October.
    12. Eichberger, Jurgen & Grant, Simon & Kelsey, David, 2005. "CEU preferences and dynamic consistency," Mathematical Social Sciences, Elsevier, vol. 49(2), pages 143-151, March.
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    Citations

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    Cited by:

    1. Craig Webb, 2015. "Piecewise additivity for non-expected utility," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 371-392.
    2. Alain Chateauneuf & Thibault Gajdos & Jean-Yves Jaffray, 2011. "Regular updating," Theory and Decision, Springer, pages 111-128.
    3. repec:dau:papers:123456789/7323 is not listed on IDEAS
    4. Adam Dominiak & Jean-Philippe Lefort, 2011. "Unambiguous events and dynamic Choquet preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 46(3), pages 401-425, April.

    More about this item

    Keywords

    Ambiguity; Updating; Choquet Expected Utility; neo-additive capacities; Conditional Certainty Equivalent Consistency;

    JEL classification:

    • D - Microeconomics
    • D - Microeconomics

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