Cautious Belief Formation
Bleile J (2014) Center for Mathematical Economics Working Papers; 507.
Bielefeld: Center for Mathematical Economics.
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| Veröffentlicht | Englisch
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Abstract / Bemerkung
We provide an axiomatic approach to a belief formation process in an informational environment
characterized by limited, heterogenous and differently precise information. For a list of previously
observed cases an agent needs to express her belief by assigning probabilities to possible outcomes.
Different numbers of observations of a particular case give rise to varying precision levels associated
to the pieces of information. Different precise information affects the cautiousness and confidence
with which agents form estimations. We modify the Concatenation axiom introduced in Billot,
Gilboa, Samet and Schmeidler (BGSS) (Econometrica, 2005) in a way to capture the impact of
precision and its related perceptional effects, while still keeping its normative appealing spirit. We
obtain a representation of a belief as a weighted sum of estimates induced by past cases. The
estimates are affected by cautiousness and confidence considerations depending on the precision
of the underlying observed information, which generalizes BGSS. The weights are determined by
frequencies of the observed cases and their similarities with the problem under consideration.
Stichworte
Belief formation;
prior;
relative frequencies;
case-based reasoning;
similarity precision;
ambiguity;
learning;
imagination;
condence;
cautiousness.
Erscheinungsjahr
2014
Serientitel
Center for Mathematical Economics Working Papers
Band
507
Seite(n)
48
ISSN
0931-6558
Page URI
https://pub.uni-bielefeld.de/record/2901523
Zitieren
Bleile J. Cautious Belief Formation. Center for Mathematical Economics Working Papers. Vol 507. Bielefeld: Center for Mathematical Economics; 2014.
Bleile, J. (2014). Cautious Belief Formation (Center for Mathematical Economics Working Papers, 507). Bielefeld: Center for Mathematical Economics.
Bleile, Jörg. 2014. Cautious Belief Formation. Vol. 507. Center for Mathematical Economics Working Papers. Bielefeld: Center for Mathematical Economics.
Bleile, J. (2014). Cautious Belief Formation. Center for Mathematical Economics Working Papers, 507, Bielefeld: Center for Mathematical Economics.
Bleile, J., 2014. Cautious Belief Formation, Center for Mathematical Economics Working Papers, no.507, Bielefeld: Center for Mathematical Economics.
J. Bleile, Cautious Belief Formation, Center for Mathematical Economics Working Papers, vol. 507, Bielefeld: Center for Mathematical Economics, 2014.
Bleile, J.: Cautious Belief Formation. Center for Mathematical Economics Working Papers, 507. Center for Mathematical Economics, Bielefeld (2014).
Bleile, Jörg. Cautious Belief Formation. Bielefeld: Center for Mathematical Economics, 2014. Center for Mathematical Economics Working Papers. 507.
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