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Journal of Risk and Uncertainty

, Volume 50, Issue 3, pp 189–208 | Cite as

Probabilistic sophistication and reverse Bayesianism

  • Edi Karni
  • Marie-Louise Vierø
Article

Abstract

This paper extends our earlier work on reverse Bayesianism by relaxing the assumption that decision makers abide by expected utility theory, assuming instead weaker axioms that merely imply that they are probabilistically sophisticated. We show that our main results, namely, (modified) representation theorems and corresponding rules for updating beliefs over expanding state spaces and null events that constitute “reverse Bayesianism,” remain valid.

Keywords

Awareness Unawareness Reverse Bayesianism Probabilistic sophistication 

JEL Classifications

D8 D81 D83 

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Department of EconomicsJohns Hopkins UniversityBaltimoreUSA
  2. 2.Warwick Business SchoolUniversity of WarwickCoventryUK
  3. 3.Department of EconomicsQueen’s UniversityKingstonCanada

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