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Probabilities as Similarity-Weighted Frequencies
Antoine Billot (),
Itzhak Gilboa () and
David Schmeidler ()
Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University
A decision maker is asked to express her beliefs by assigning probabilities to certain possible states. We focus on the relationship between her database and her beliefs. We show that, if beliefs given a union of two databases are a convex combination of beliefs given each of the databases, the belief formation process follows a simple formula: beliefs are a similarity-weighted average of the beliefs induced by each past case.
Keywords: Similarity; Probability (search for similar items in EconPapers)
JEL-codes: C8 D8 (search for similar items in EconPapers)
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Published in Econometrica (2005), 73: 1125-1136
Downloads: (external link) http://cowles.econ.yale.edu/P/cd/d14b/d1492.pdf (application/pdf)
Related works: Journal Article: Probabilities as Similarity-Weighted Frequencies (2005) Working Paper: Probabilities as Similarity-Weighted Frequencies (2004) This item may be available elsewhere in EconPapers: Search for items with the same title.
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Persistent link: http://EconPapers.repec.org/RePEc:cwl:cwldpp:1492
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