Article ID Journal Published Year Pages File Type
957519 Journal of Economic Theory 2007 22 Pages PDF
Abstract

This paper states necessary and sufficient conditions for the existence, uniqueness, and updating according to Bayes’ rule, of subjective probabilities representing individuals’ beliefs. The approach is preference based, and the result is an axiomatic subjective expected utility model of Bayesian decision making under uncertainty with state-dependent preferences. The theory provides foundations for the existence of prior probabilities representing decision makers’ beliefs about the likely realization of events and for the updating of these probabilities according to Bayes’ rule.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Authors
,