2025/02/02 by Dominiak, Adam, Kovach, Matthew, Tserenjigmid, Gerelt · 1 citation
#FOS: Economics and business #Theoretical Economics (econ.TH)
paper · doi:10.48550/arxiv.2502.00958
We study belief revision when information is represented by a set of probability distributions, or general information. General information extends the standard event notion while including qualitative information (A is more likely than B), interval information (A has a ten-to-twenty percent chance), and more. We behaviorally characterize Inertial Updating: the decision maker's posterior is of minimal subjective distance from her prior, given the information constraint. Further, we introduce and characterize a notion of Bayesian updating for general information and show that Bayesian agents may disagree. We also behaviorally characterize f-divergences, the class of distances consistent with Bayesian updating.