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Unforeseen evidence

Evan Piermont

Journal of Economic Theory, 2021, vol. 193, issue C

Abstract: I propose a normative updating rule, extended Bayesianism, for the incorporation of probabilistic information arising from the process of becoming more aware. Extended Bayesianism generalizes standard Bayesian updating to allow the posterior to reside on richer probability space than the prior. I then provide a behavioral characterization of this rule to conclude that a decision maker's subjective expected utility beliefs are consistent with extended Bayesianism.

Keywords: Extended Bayesianism; Reverse Bayesianism; Conditional expectations (search for similar items in EconPapers)
JEL-codes: D81 D83 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jet.2021.105235

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