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Uncertain Evidence and the Order of Updates: Lessons for Econometrics from Philosophical Analysis

Author

Listed:
  • Phoebe Koundouri
  • Nikitas Pittis

    (University of Piraeus, Greece)

  • Panagiotis Samartzis

Abstract

There are many real-world situations where evidence is uncertain, arising from factors such as noisy measurements, incomplete data, or ambiguous observations. In such cases, Bayesian Conditionalization (BC), which assumes evidence is fully certain, is not an appropriate method for belief updating. Instead, Jeffrey Conditionalization (JC) offers a flexible alternative that accommodates uncertain evidence by allowing probabilistic updates. However, a key problem with JC, not present in BC, is its noncommutative nature: the order in which evidence is received affects the resulting posterior probabilities. This feature has significant implications for the agreement of posterior probabilities between agents. Specifically, two agents with identical priors and access to the same total evidence can reach different posterior beliefs if they process the evidence in different sequences.

Suggested Citation

  • Phoebe Koundouri & Nikitas Pittis & Panagiotis Samartzis, 2025. "Uncertain Evidence and the Order of Updates: Lessons for Econometrics from Philosophical Analysis," DEOS Working Papers 2503, Athens University of Economics and Business.
    • Handle: RePEc:aue:wpaper:2503
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    More about this item

    Keywords

    Uncertain Evidence; Jeffrey Conditionalization; Order of Updating; and Disagreement;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other

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