Open AccessDynamic objective and subjective rationality
Author(s) -
Faro José Heleno,
Lefort JeanPhilippe
Publication year - 2019
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te2122
Subject(s) - rationality , expected utility hypothesis , unanimity , prior probability , preference , subjective expected utility , mathematical economics , bayesian probability , computer science , set (abstract data type) , economics , econometrics , microeconomics , artificial intelligence , programming language , political science , law
We characterize prior‐by‐prior Bayesian updating using a model proposed by Gilboa, Maccheroni, Marinacci, and Schmeidler (2010) that jointly considers objective and subjective rationality. These rationality concepts are subject to the Bewley unanimity rule and maxmin expected utility, respectively, with a common set of priors and the same utility over consequences. We use this setup with two preference relations to develop a novel rationale for full Bayesian updating of maxmin expected utility preferences.