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Dynamic awareness and zero probability beliefs

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  • John Quiggin

    (University of Queensland)

Abstract

In this note, it is shown that in a Bayesian model with unawareness of impossible (probability zero), or vanishingly improbable, events, awareness can only change after such an improbable event has actually been observed.

Suggested Citation

  • John Quiggin, 2017. "Dynamic awareness and zero probability beliefs," Theory and Decision, Springer, vol. 83(3), pages 309-313, October.
    • Handle: RePEc:kap:theord:v:83:y:2017:i:3:d:10.1007_s11238-016-9580-x
    DOI: 10.1007/s11238-016-9580-x
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    References listed on IDEAS

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    1. Edi Karni & Marie-Louise Vier?, 2013. ""Reverse Bayesianism": A Choice-Based Theory of Growing Awareness," American Economic Review, American Economic Association, vol. 103(7), pages 2790-2810, December.
    2. Simon Grant & John Quiggin, 2013. "Inductive reasoning about unawareness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 717-755, November.
    3. Salvatore Modica, 2008. "Unawareness, priors and posteriors," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 31(2), pages 81-94, November.
    4. Martin Meier & Burkhard Schipper, 2014. "Bayesian games with unawareness and unawareness perfection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 219-249, June.
    5. Heifetz, Aviad & Meier, Martin & Schipper, Burkhard C., 2006. "Interactive unawareness," Journal of Economic Theory, Elsevier, vol. 130(1), pages 78-94, September.
    6. Martin Meier & Burkhard Schipper, 2014. "Bayesian games with unawareness and unawareness perfection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 219-249, June.
    7. Jing Li, 2008. "A Note on Unawareness and Zero Probability," PIER Working Paper Archive 08-022, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
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    Keywords

    Unawareness; Zero probability events;

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