Subjective Probability and Confidence
نویسنده
چکیده
This paper shows that a unique and additive subjective belief can be derived from choice behavior that reveals Ellsberg-type ambiguity aversion. This belief is obtained as a component of a utility representation where subjective probabilities are contaminated by an exogenous information set. This representation delivers a parameter that is interpretable as a degree of the decision maker’s confidence in her belief. A model of complete ignorance is obtained by taking the information set equal to the simplex of all probability measures.
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