Conditional Inference under Disjunctive Rationality

Conditional Modeling and Conditional Inference

Bayesian Inference under Ambiguity: Conditional Prior Belief Functions

Bayesian inference under imprecise prior information is studied: the starting point is a precise strategy σ and a full B-conditional prior belief functionBelB , conveying ambiguity in probabilistic prior information. In finite spaces, we give a closed form expression for the lower envelope P of the class of full conditional probabilities dominating {BelB , σ} and, in particular, for the related...

Rationality in human nonmonotonic inference

This article tests human inference rationality when dealing with default rules. To study human rationality, psychologists currently use classical models of logic or probability theory as normative models for evaluating human ability to reason rationally. Our position is that this approach is convincing, but only manages to capture a specific case of inferential ability with little regard to con...

Economic Rationality under Uncertainty

Though uncertainty pervades all aspects of life and human action, it has a rather short history in economics. Surprisingly, Daniel Bernoulli’s (1738) notion of expected utility, which suggests that (in games of chance) monetary risky ventures ought to be evaluated by the sum of utilities of outcomes weighted by the corresponding probabilities, was not immediately used in economic theory. Indeed...

Rationality Under Intrinsic Uncertainty

Both Behavioral Finance and market practitioners view confidence as one of the most important psychological variables influencing investor behavior. In the Behavioral Finance literature, confidence is associated with biased decisions and overreaction: investor confidence leads them to give too much importance to some ideas and to refuse to seriously take new facts into account until the grounds...