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Probability and Uncertainty in Economic Modeling, Second Version

Author

Listed:
  • Itzhak Gilboa

    (Department of Economic, Tel-Aviv University)

  • Andrew Postlewaite

    (Department of Economics, University of Pennsylvania)

  • David Schmeidler

    (Department of Economics, Ohio State University)

Abstract

Economic modeling assumes, for the most part, that agents are Bayesian, that is, that they entertain probabilistic beliefs, objective or subjective, regarding any event in question. We argue that the formation of such beliefs calls for a deeper examination and for explicit modeling. Models of belief formation may enhance our understanding of the probabilistic beliefs when these exist, and may also help up characterize situations in which entertaining such beliefs is neither realistic nor necessarily rational.

Suggested Citation

  • Itzhak Gilboa & Andrew Postlewaite & David Schmeidler, 2007. "Probability and Uncertainty in Economic Modeling, Second Version," PIER Working Paper Archive 08-002, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 28 Jan 2008.
    • Handle: RePEc:pen:papers:08-002
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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