Revisiting Savage in a conditional world

I present an axiomatization of subjective expected utility and Bayesian updating in a conditional decision problem. This result improves our understanding of the Bayesian standard from two perspectives: 1) it uses a set of axioms which are weak and intuitive; 2) it provides a formal proof to results on the relation between dynamic consistency, expected utility and Bayesian updating which have never been explicitly proved in a fully subjective framework.

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Year of publication:	2002-02-20
Authors:	Ghirardato, Paolo
Published in:	Economic Theory. - Springer. - Vol. 20.2002, 1, p. 83-92
Publisher:	Springer
Subject:	Subjective expected utility \| Bayes's rule \| Dynamic consistency \| Consequentialism

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Extent:	application/pdf
Type of publication:	Article
Notes:	Received: December 1, 2000; revised version: February 26, 2001
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005371200