Cognitive Foundations of Probability

Itzhak Gilboa and David Schmeidler

Working Papers from Tel Aviv

Abstract: Prediction is based on past cases. We assume that a predictor can rank eventualities according to their plausibility given any memory that consists of repetitions of past cases. In a companion paper, we show that under mild consistency requirements, these rankings can be represented by numerical functions, such that the function corresponding to each eventuality is linear in the number of case repetitions. In this paper we extend the analysis to rankings of events. Our main result is that a cancellation condition a la de Finetti implies that these functions are additive with respect ot union of disjoint sets.

Keywords: PROJECTIONS; MATHEMATICAL ANALYSIS (search for similar items in EconPapers)
JEL-codes: C53 C60 (search for similar items in EconPapers)
Pages: 46 pages
Date: 1999
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Related works:
Working Paper: Cognitive Foundations of Probability (2002)
Working Paper: Cognitive Foundations of Probability (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:teavfo:30-99

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