Center for Economic Research, Department of Economics, University of Minnesota
An algorithm is proposed for updating an initial
period objective (risk) function by means of transitional
utility (loss) assessments, in a manner analogous to Bayes'
theorem for probability. Specification of updated probability
assessments is not required. The algorithm is shown to be
robust with respect to a fully updated procedure, given certain
empirically meaningful restrictions. Existence of the initial
period objective function is axiomatized in the context of a
model which adopts a symmetrical approach to utility and
Tesfatsion, L., (1976), ""Bayes' Theorem" for Utility", Discussion Paper No. 65, Center for Economic Research, Department of Economics, University of Minnesota.
"Bayes' Theorem" for Utility.
Center for Economic Research, Department of Economics, University of Minnesota.
Retrieved from the University of Minnesota Digital Conservancy,
Content distributed via the University of Minnesota's Digital Conservancy may be subject to additional license and use restrictions applied by the depositor.