Probabilities in Economic Modeling

18 Pages Posted: 5 Aug 2007

See all articles by Itzhak Gilboa

Itzhak Gilboa

Tel Aviv University - Eitan Berglas School of Economics; HEC Paris - Economics & Decision Sciences

Andrew Postlewaite

University of Pennsylvania - Department of Economics

David Schmeidler

Tel Aviv University - Eitan Berglas School of Economics; Ohio State University (OSU)

Date Written: August 2007

Abstract

Economic modeling assumes, for the most part, that agents are Bayesian, that is, that they entertain probabilistic beliefs, objective or subjective, regarding any event in question. We argue that the formation of such beliefs calls for a deeper examination and for explicit modeling. Models of belief formation may enhance our understanding of the probabilistic beliefs when these exist, and may also help up characterize situations in which entertaining such beliefs is neither realistic nor necessarily rational.

Keywords: Decision making, Bayesian, Behavioral Economics

JEL Classification: B4, D8

Suggested Citation

Gilboa, Itzhak and Postlewaite, Andrew and Schmeidler, David, Probabilities in Economic Modeling (August 2007). PIER Working Paper No. 07-023, Available at SSRN: https://ssrn.com/abstract=1004727 or http://dx.doi.org/10.2139/ssrn.1004727

Itzhak Gilboa (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
972-3-640-6423 (Phone)
972-3-640-9908 (Fax)

HEC Paris - Economics & Decision Sciences

Paris
France

Andrew Postlewaite

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-7350 (Phone)
215-573-2057 (Fax)

HOME PAGE: http://www.econ.upenn.edu/~apostlew

David Schmeidler

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972-3-640-9643 (Phone)
+972-3-640-9357 (Fax)

Ohio State University (OSU) ( email )

Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
193
Abstract Views
1,123
Rank
282,390
PlumX Metrics