Ambiguity and the Bayesian Paradigm

Itzhak Gilboa and Massimo Marianacci

No 275755, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: This is a survey of some of the recent decision-theoretic literature involving beliefs that cannot be quantified by a Bayesian prior. We discuss historical, philosophical, and axiomatic foundations of the Bayesian model, as well as of several alternative models recently proposed. The definition and comparison of ambiguity aversion and the updating of non-Bayesian beliefs are briefly discussed. Finally, several applications are mentioned to illustrate the way that ambiguity (or “Knightian uncertainty”) can change the way we think about economic problems.

Keywords: Financial Economics; International Development (search for similar items in EconPapers)
Pages: 70
Date: 2011-04
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Citations: View citations in EconPapers (32)

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Working Paper: Ambiguity and the Bayesian Paradigm (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275755

DOI: 10.22004/ag.econ.275755

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