"Reverse Bayesianism": A Choice-Based Theory of Growing Awareness
This paper introduces a new approach to modeling the expanding universe of decision makers in the wake of growing awareness, and invokes the axiomatic approach to model the evolution of decision makers' beliefs as awareness grows. The expanding universe is accompanied by extension of the set of acts, the preference relations over which are linked by a new axiom, invariant risk preferences, asserting that the ranking of lotteries is independent of the set of acts under consideration. The main results are representation theorems and rules for updating beliefs over expanding state spaces and null events that have the flavor of "reverse Bayesianism."
|Date of creation:||Dec 2010|
|Date of revision:|
|Publication status:||Forthcoming in American Economic Review|
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- Eddie Dekel & Barton L. Lipman & Aldo Rustichini, 1998. "Standard State-Space Models Preclude Unawareness," Econometrica, Econometric Society, vol. 66(1), pages 159-174, January.
- Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2006.
Journal of Economic Theory,
Elsevier, vol. 130(1), pages 78-94, September.
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- Burkhard Schipper, 2013.
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International Journal of Game Theory,
Springer, vol. 42(3), pages 725-753, August.
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"Inductive reasoning about unawareness,"
Risk & Uncertainty Working Papers
WPR09_1, Risk and Sustainable Management Group, University of Queensland.
- Grant, Simon & Quiggin, John, 2012. "Inductive Reasoning About Unwareness," Risk and Sustainable Management Group Working Papers 151202, University of Queensland, School of Economics.
- Grant, Simon & Quiggin, John, 2009. "Inductive Reasoning About Unwareness," Risk and Sustainable Management Group Working Papers 151188, University of Queensland, School of Economics.
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- Joseph Y. Halpern, 2000.
"Alternative Semantics for Unawareness,"
Game Theory and Information
- Modica, Salvatore & Rustichini, Aldo, 1999. "Unawareness and Partitional Information Structures," Games and Economic Behavior, Elsevier, vol. 27(2), pages 265-298, May.
- Halpern, Joseph Y. & Rego, Leandro Chaves, 2008. "Interactive unawareness revisited," Games and Economic Behavior, Elsevier, vol. 62(1), pages 232-262, January.
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