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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Mark J. Machina and Marciano Siniscalchi
796
works as follows: out of the set
C
of priors characterizing the ex-ante preference, select
the measures assigning the maximum probability to the event E that has occurred, and
only update those. Gilboa and Schmeidler call this the maximum-likelihood update rule.
Note that their characterization result only covers preferences that are both MEU and
CEU; a characterization of maximum-likelihood updating for general MEU preferences
is not known.
Finally, Siniscalchi (2009a) defines and axiomatizes an updating rule for VEU prefer-
ences, which entails (i) updating the baseline prior in the usual way, and (ii) ...
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Publisher Resources

ISBN: 9780444536853