Subjective Probabilities on Subjectively Unambiguous Events.
This paper suggests a behavioral definition of (subjective) ambiguity in an abstract setting where objects of choice are Savage-style acts. Then axioms are described that deliver probabilistic sophistication of preference on the set of unambiguous acts. In particular, both the domain and the values of the decision-maker's probability measure are derived from preference. It is argued that the noted result also provides a decision-theoretic foundation for the Knightian distinction between risk and ambiguity.
Year of publication: |
2001
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Authors: | Epstein, Larry G ; Zhang, Jiankang |
Published in: |
Econometrica. - Econometric Society. - Vol. 69.2001, 2, p. 265-306
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Publisher: |
Econometric Society |
Saved in:
Saved in favorites
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