An Axiomatic Model of Non-Bayesian Updating
This paper models an agent in a three-period setting who does not update according to Bayes'Rule, and who is self-aware and anticipates her updating behavior when formulating plans. The agent is rational in the sense that her dynamic behavior is derived from a single stable preference order on a domain of state-contingent menus of acts. A representation theorem generalizes the (dynamic version of) Anscombe-Aumann's theorem so that both the prior and the way in which it is updated are subjective.
|Date of creation:||Sep 2005|
|Date of revision:|
|Note:||Forthcoming in Review of Economic Studies|
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