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What were you thinking? Decision theory as coherence test.
- Source :
- Theoretical Economics; May2022, Vol. 17 Issue 2, p507-519, 13p
- Publication Year :
- 2022
-
Abstract
- Decision theory can be used to test the logic of decision making—one may ask whether a given set of decisions can be justified by a decision‐theoretic model. Indeed, in principal–agent settings, such justifications may be required—a manager of an investment fund may be asked what beliefs she used when valuing assets and a government may be asked whether a portfolio of rules and regulations is coherent. In this paper we ask which collections of uncertain‐act evaluations can be simultaneously justified under the maxmin expected utility criterion by a single set of probabilities. We draw connections to the fundamental theorem of finance (for the special case of a Bayesian agent) and revealed‐preference results. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 15557561
- Volume :
- 17
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Theoretical Economics
- Publication Type :
- Academic Journal
- Accession number :
- 157072249
- Full Text :
- https://doi.org/10.3982/TE4707