Université de Lausanne
Ecole des HEC
Département d'économétrie et d'économie politique

DEEP-IGTG Seminar Series in Microeconomic Theory

Mercredi 30 avril 2008, 12h00
Extranef, salle 126

Richard BRADLEY
(London School of Economics, UK)

New Foundations for Bayesian Decision Theory

Abstract
This paper provides new foundations for Bayesian Decision Theory based on a representation theorem for preferences defined on a set of prospects containing both factual and conditional possibilities. This use of a rich set of prospects not only provides a framework within which the main theoretical claims of Savage, Ramsey, Jeffrey and others can be stated and compared, but also allows for the postulation of an extended Bayesian model of rational belief and desire from which they can be derived as special cases. The main theorem of the paper establishes the existence of a such a Bayesian representation of preferences over conditional prospects i.e. the existence of a pair of real-valued functions respectively measuring the agent's degrees of belief and desire and which satisfy the postulated rationality conditions on partial belief and desire. The representation of partial belief is shown to be unique and that of partial desire, unique up to a linear transformation.

Web site of the seminar (with paper online): http://www.hec.unil.ch/deep/evenements-english/e-sem-all-2007-08.htm