On the Representation of Beliefs by Probabilities
نویسنده
چکیده
This paper explores two axiomatic structures of subjective expected utility assuming a ...nite state-space and state-dependent, connected, topological outcome-spaces. Building on the work of Karni and Schmeidler (1981) the analytical framework includes, in addition to the preference relation on acts, introspective preferences on hypothetical lotteries that are linked to the preference relation on acts by consistency axioms. The two models accommodate state-dependent preferences and yield subjective probabilities that correctly represent the decision-maker’s beliefs. Stateindependent preferences are a special case.
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