SFB 504 discussion paper 08-07

Jürgen Eichberger
Sonderforschungsbereich 504
L 13, 15, D-68131 Mannheim
juergen.eichberger@awi.uni-heidelberg.de

Ani Guerdjikova
Cornell University
Uris Hall 462, Ithaca, NY 14853
ag334@cornell.edu

Multiple Priors as Similarity Weighted Frequencies


Abstract:
In this paper, we consider a decision-maker who tries to learn the distribution of outcomes from previously observed cases. For each observed sequence of cases the decision-maker predicts a set of priors expressing his beliefs about the underlying probability distribution. We impose a version of the concatenation axiom introduced in BILLOT, GILBOA, SAMET AND SCHMEIDLER (2005) which insures that the sets of priors can be represented as a weighted sum of the observed frequencies of cases. The weights are the uniquely determined similarities between the observed cases and the case under investigation.
Keywords:
JEL-Classification:
Project:
C8 Eichberger
Creation date:
2008-05-26
Publication Status
Downloadable version
http://www.sfb504.uni-mannheim.de/publications/dp08-07.pdf
Download titlepage for internal use only
pdf-file


Direct questions and comments to our webmaster.