Probabilities as Similarity-Weighted Frequencies

A decision maker is asked to express her beliefs by assigning probabilities to certain possible states. We focus on the relationship between her database and her beliefs. We show that, if beliefs given a union of two databases are a convex combination of beliefs given each of the databases, the belief formation process follows a simple formula: beliefs are a similarity-weighted average of the beliefs induced by each past case.

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Year of publication:	2004-11
Authors:	Billot, Antoine ; Gilboa, Itzhak ; Schmeidler, David ; Samet, Dov
Institutions:	Cowles Foundation for Research in Economics, Yale University
Subject:	Similarity \| Probability

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Extent:	application/pdf
Series:	Cowles Foundation Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Published in Econometrica (2005), 73: 1125-1136 The price is None Number 1492 20 pages
Classification:	C8 - Data Collection and Data Estimation Methodology; Computer Programs ; D8 - Information and Uncertainty
Source:	RePEc - Research Papers in Economics

Persistent link: https://ebvufind01.dmz1.zbw.eu/10005463949