We show in this paper how, in a model of assets exchange in complete competitive markets, heterogeneity of the agent’s sub jective probabilities generates aggregate expenditures for Arrow-Debreu securities that have the gross substitutability property, with the consequences that competitive...

A decision maker has to choose one of several random variables whose distributions are not known. As a Bayesian, she behaves as if she knew the distributions. In this paper we suggest an axiomatic derivation of these (subjective) distributions, which is more economical than the derivations by de...

This note reconsiders some of the issues raised by Kadane and Larkey, and Harsanyi, and briefly discusses some relevant empirical results.

Management Science recently printed an exchange of views between Kadane and Larkey (Kadane, J. B., P. D. Larkey. 1982. Subjective probability and the theory of games. Management Sci. 28 113--120; Kadane, J. B., P. D. Larkey. 1982. Reply to Professor Harsanyi. Management Sci. 28 124.) and Harsanyi...

The normative solution concepts of game theory try to provide a clear mathematical characterization of what it means to act rationally in a game where all players expect each other to act rationally. Kadane and Larkey reject the use of these normative solution concepts. Yet, this amounts to...

This paper explores some of the consequences of adopting a modern subjective view of probability for game theory. The consequences are substantial. The subjective view of probability clarifies the important distinction between normative and positive theorizing about behavior in games, a...