Probabilities in Economic Modeling

Itzhak Gilboa, Andrew Postlewaite and David Schmeidler

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: Economic modeling assumes, for the most part, that agents are Bayesian, that is, that they entertain probabilistic beliefs, objective or subjective, regarding any event in question. We argue that the formation of such beliefs calls for a deeper examination and for explicit modeling. Models of belief formation may enhance our understanding of the probabilistic beliefs when these exist, and may also help up characterize situations in which entertaining such beliefs is neither realistic nor necessarily rational.

Keywords: Decision making; Bayesian; Behavioral Economics (search for similar items in EconPapers)
JEL-codes: B4 D8 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2007-08-02
New Economics Papers: this item is included in nep-cbe, nep-hpe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Probabilities in Economic Modelling (2008)
Working Paper: Probability and Uncertainty in Economic Modeling, Second Version (2008)
Working Paper: Probabilities in Economic Modeling (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:07-023

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