Research Paper Bayesian Updating for Complementarily Additive Beliefs under Ambiguity

Horie, Mayumi

9352016-02-08 , Institute of Economic Research, Kyoto University
Description
This paper proposes a formal characterization of extended Bayesian updating for complementarily additive subjective beliefs under ambiguity, which are compatible with a wide range of choice behavior toward ambiguity. The main result shows that, based on the biseparability of Ghirardato and Marinacci (2001), extended Bayesian updating characterizes the update rule which is a step-by-step composite updating for priors, where one of Dempster-Shafer rule, Bayes'update rule and Fagin-Halpern rule is applied to each step. As applications, more speci c preference relations are examined, such as the maxmin expected utility, the rank-dependent expected utility, and the concave expected utility preferences by Lehrer (2009).
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http://repository.kulib.kyoto-u.ac.jp/dspace/bitstream/2433/204609/1/DP935.pdf

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