"Reverse Bayesianism": A Choice-Based Theory of Growing Awareness

Edi Karni and Marie-Louise VierÃÿ

No 273757, Queen's Economics Department Working Papers from Queen's University - Department of Economics

Abstract: This paper introduces a new approach to modeling the expanding universe of de- cision 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."

Keywords: Financial Economics; International Development (search for similar items in EconPapers)
Pages: 27
Date: 2010-12
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Related works:
Journal Article: "Reverse Bayesianism": A Choice-Based Theory of Growing Awareness (2013)
Working Paper: "Reverse Bayesianism": A Choice-Based Theory of Growing Awareness (2012)
Working Paper: "reverse Bayesianism": A Choice-based Theory Of Growing Awareness (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:quedwp:273757

DOI: 10.22004/ag.econ.273757

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