- Decision Making with Belief Functions: Compatibility and Incompatibility with the Sure-Thing Principle
- Journal of Risk and Uncertainty
- Volume | Issue number
- 7 | 7
- Pages (from-to)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
This paper studies situations in which information is ambiguous, and only part of it can be probabilized. It is shown that the information can be modeled through belief functions if and only if the nonprobabilizable information is subject to the principles of complete ignorance. Next the representability of decisions by belief functions on outcomes is justified by means of a neutrality axiom. The natural weakening of Savage's sure-thing principle to unambiguous events is examined, and its implications for decision making are identified.
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