Updating Beliefs Under Risk and Uncertainty

Keiran Sharpe

The Economic Record, 2019, vol. 95, issue S1, 39-64

Abstract: It is possible to represent decision makers’ beliefs on the algebra R×R, rather than R alone. Doing so allows us to represent decision makers’ perceptions of risk on one part of the algebra, and their perceptions of uncertainty on the other. This paper shows that such beliefs can be updated in a ‘Bayesian’ manner and that the resulting representation of beliefs is reasonable relative to some other approaches. The model of belief formation and decision making is then used to explain some instances of anomalous economic behaviour.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/1475-4932.12461

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ecorec:v:95:y:2019:i:s1:p:39-64

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0249

Access Statistics for this article

The Economic Record is currently edited by Paul Miller, Glenn Otto and Martin Richardson

More articles in The Economic Record from The Economic Society of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().