Kicking off the discussion following Savage's presentation at the 1952 Paris colloquium, Arrow raised what he considered to be a difficulty with the intuitive interpretation of Savage's theorem. It suggests that decision makers strictly prefer betting on an event of measure zero over betting on...

This paper exposes a difficulty in applying the revealed preference methodology to the definition of subjective probabilities. It shows that in the presence of unknowable states it is impossible to provide choice-based foundations of prior probabilities in Bayes' theory.