David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
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Theory and Decision 46 (2):107-138 (1999)
Ellsberg's (1961) famous paradox shows that decision-makers give events with âknownâ probabilities a higher weight in their outcome evaluation. In the same article, Ellsberg suggests a preference representation which has intuitive appeal but lacks an axiomatic foundation. Schmeidler (1989) and Gilboa (1987) provide an axiomatisation for expected utility with non-additive probabilities. This paper introduces E-capacities as a representation of beliefs which incorporates objective information about the probability of events. It can be shown that the Choquet integral of an E-capacity is the Ellsberg representation. The paper further explores properties of this representation of beliefs and provides an axiomatisation for them
|Keywords||Ellsberg paradox Uncertainty aversion Choquet integral Non-additive probabilities|
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Citations of this work BETA
A. Ludwig & A. Zimper (2013). A Parsimonious Model of Subjective Life Expectancy. Theory and Decision 75 (4):519-541.
Alexander Zimper (2011). Re-Examining the Law of Iterated Expectations for Choquet Decision Makers. Theory and Decision 71 (4):669-677.
Takao Asano & Hiroyuki Kojima (forthcoming). An Axiomatization of Choquet Expected Utility with Cominimum Independence. Theory and Decision.
Christian Bauer (2012). Products of Non-Additive Measures: A Fubini-Like Theorem. Theory and Decision 73 (4):621-647.
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