Case-based belief formation under ambiguity
Jürgen Eichberger and
Mathematical Social Sciences, 2010, vol. 60, issue 3, 161-177
In this paper, we consider a decision maker who tries to learn the distribution of outcomes from previously observed cases. For each observed database of cases the decision maker predicts a set of priors expressing his beliefs about the underlying probability distribution. We impose a version of the concatenation axiom introduced in Billot et al. (2005) which ensures that the sets of priors can be represented as a weighted sum of the observed frequencies of cases. The weights are the uniquely determined similarities between the observed cases and the case under investigation. The predicted probabilities, however, may vary with the number of observations. This generalization of Billot et al. (2005) allows one to model learning processes.
Keywords: Case-based; decision; theory; Ambiguity; Multiple; priors; Learning; Similarity (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:matsoc:v:60:y:2010:i:3:p:161-177
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