Beliefs and tastes in context
David Schmeidler
(joint work with Antoine Billot, Itzhak Gilboa, and Dov Samet)
Abstract:
A decision maker (player) is asked to quantify her beliefs
over a state space (strategies of other players) by a
probability vector. We focus on the relationship between her
data base and her beliefs. We show that, if beliefs given a
union of two databases are a convex combination of beliefs
given each of the databases, the belief formation process
follows a simple formula: beliefs are normalized
similarity-weighted aggregation of the beliefs induced by
each past case.