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 Please use this identifier to cite or link to this item: http://hdl.handle.net/1807/10106

 Title: Updating preferences with multiple priors Authors: Eran Hanany; Tel Aviv UniversityPeter Klibanoff; Northwestern University Keywords: Updating, dynamic consistency, ambiguity, Ellsberg, Bayesian, consequentialismD81, D83, D91 Issue Date: 5-Sep-2007 Publisher: Theoretical Economics Citation: Theoretical Economics; Vol 2, No 3 (2007) Abstract: [This item is a preserved copy. To view the original, visit http://econtheory.org/] We propose and axiomatically characterize dynamically consistent update rules for decision making under ambiguity. These rules apply to the preferences with multiple priors of Gilboa and Schmeidler (1989), and are the first, for any model of preferences over acts, to be able to reconcile typical behavior in the face of ambiguity (as exemplified by Ellsberg.s paradox) with dynamic consistency for all non-null events. Updating takes the form of applying Bayes. rule to subsets of the set of priors, where the specific subset depends on the preferences, the conditioning event, and the choice problem (i.e., a feasible set of acts together with an act chosen from that set). URI: http://hdl.handle.net/1807/10106 Other Identifiers: http://econtheory.org/ojs/index.php/te/article/view/20070261 Rights: Authors who publish in Theoretical Economics will release their articles under the Creative Commons Attribution-NonCommercial license. This license allows anyone to copy and distribute the article for non-commercial purposes provided that appropriate attribution is given. Appears in Collections: Volume 2, Number 3 (September 2007)

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