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

Edi Karni and Marie-Louise Vier?
Authors registered in the RePEc Author Service: Marie-Louise Vierø

American Economic Review, 2013, vol. 103, issue 7, 2790-2810

Abstract: This article 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 events that have the flavor of "reverse Bayesianism."

JEL-codes: D81 D83 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.7.2790
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Citations: View citations in EconPapers (56)

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Related works:
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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