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Journal Articles Economics and Philosophy Year : 2009

Is It Always Rational to Satisfy Savage's Axioms?

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Abstract

This note argues that, under some circumstances, it is more rational not to behave in accordance with a Bayesian prior than to do so. The starting point is that in the absence of information, choosing a prior is arbitrary. If the prior is to have meaningful implications, it is more rational to admit that one does not have sufficient information to generate a prior than to pretend that one does. This suggests a view of rationality that requires a compromise between internal coherence and justification, similarly to compromises that appear in moral dilemmas. Finally, it is argued that Savage's axioms are more compelling when applied to a naturally given state space than to an analytically constructed one, in the latter case, it may be more rational to violate the axioms than to be Bayesian.

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hal-00493170 , version 1 (18-06-2010)

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Itzhak Gilboa, Andrew Postlewaite, David Schmeidler. Is It Always Rational to Satisfy Savage's Axioms?. Economics and Philosophy, 2009, Vol.25,nº3, pp.285-297. ⟨10.1017/S0266267109990241⟩. ⟨hal-00493170⟩

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