This article analyzes investors’ portfolio selection problems in a two-period dynamic model of Knightian uncertainty. We account for the existence of portfolio inertia in this two-period framework. Furthermore, by incorporating investors’ updating behavior, we analyze how observing new information in the first period will affect investors’ behavior. By this analysis, we show that observing new information in the first period will expand portfolio inertia in the second period compared with the case in which observing new information has not been gained (...) in the first period if the degree of Knightian uncertainty is sufficiently large. (shrink)

Additionally, the text shows how to develop computationally feasible methods to mesh with this framework.

People are less willing to accept bets about an event when they do not know the true probability of that event. Such uncertainty aversion has been used to explain certain economic phenomena. This paper considers how far standard private information explanations (with strategic decisions to accept bets) can go in explaining phenomena attributed to uncertainty aversion. This paper shows that if two individuals have different prior beliefs about some event, and two sided private information, then each individual’s willingness to bet (...) will exhibit a bid ask spread property. Each individual is prepared to bet for the event, at sufficiently favorable odds, and against, at sufficiently favorable odds, but there is an intermediate range of odds where each individual is not prepared to bet either way. This is only true if signals are distributed continuously and sufficiently smoothly. It is not true, for example, in a finite signal model. (shrink)

Epistemology is the study of knowledge and justified belief. Belief is thus central to epistemology. It comes in a qualitative form, as when Sophia believes that Vienna is the capital of Austria, and a quantitative form, as when Sophia's degree of belief that Vienna is the capital of Austria is at least twice her degree of belief that tomorrow it will be sunny in Vienna. Formal epistemology, as opposed to mainstream epistemology (Hendricks 2006), is epistemology done in a formal way, (...) that is, by employing tools from logic and mathematics. The goal of this entry is to give the reader an overview of the formal tools available to epistemologists for the representation of belief. A particular focus will be the relation between formal representations of qualitative belief and formal representations of quantitative degrees of belief. (shrink)

Various theories try to give accounts of how measures of this confidence do or ought to behave, both as far as the internal mental consistency of the agent as ...

Ranking functions have been introduced under the name of ordinal conditional functions in Spohn (1988; 1990). They are representations of epistemic states and their dynamics. The most comprehensive and up to date presentation is Spohn (manuscript).

The arguments for Bayesianism in the literature fall into three broad categories. There are Dutch Book arguments, both of the traditional pragmatic variety and the modern ‘depragmatised’ form. And there are arguments from the so-called ‘representation theorems’. The arguments have many similarities, for example they have a common conclusion, and they all derive epistemic constraints from considerations about coherent preferences, but they have enough differences to produce hostilities between their proponents. In a recent paper, Maher (1997) has argued that the (...) pragmatised Dutch Book arguments are unsound and the depragmatised Dutch Book arguments question begging. He urges we instead use the representation theorem argument as in his (1993). In this paper I argue that Maher’s own argument is question-begging, though in a more subtle and interesting way than his Dutch Book wielding opponents. (shrink)

Degrees of belief are familiar to all of us. Our confidence in the truth of some propositions is higher than our confidence in the truth of other propositions. We are pretty confident that our computers will boot when we push their power button, but we are much more confident that the sun will rise tomorrow. Degrees of belief formally represent the strength with which we believe the truth of various propositions. The higher an agent’s degree of belief for a particular (...) proposition, the higher her confidence in the truth of that proposition. For instance, Sophia’s degree of belief that it will be sunny in Vienna tomorrow might be .52, whereas her degree of belief that the train will leave on time might be .23. The precise meaning of these statements depends, of course, on the underlying theory of degrees of belief. These theories offer a formal tool to measure degrees of belief, to investigate the relations between various degrees of belief in different propositions, and to normatively evaluate degrees of belief. (shrink)

Richard Jeffrey's generalization of Bayes' rule of conditioning follows, within the theory of belief functions, from Dempster's rule of combination and the rule of minimal extension. Both Jeffrey's rule and the theory of belief functions can and should be construed constructively, rather than normatively or descriptively. The theory of belief functions gives a more thorough analysis of how beliefs might be constructed than Jeffrey's rule does. The inadequacy of Bayesian conditioning is much more general than Jeffrey's examples of uncertain perception (...) might suggest. The ``parameter α '' that Hartry Field has introduced into Jeffrey's rule corresponds to the "weight of evidence" of the theory of belief functions. (shrink)

The paper provides an argument for the thesis that an agent’s degrees of disbelief should obey the ranking calculus. This Consistency Argument is based on the Consistency Theorem. The latter says that an agent’s belief set is and will always be consistent and deductively closed iff her degrees of entrenchment satisfy the ranking axioms and are updated according to the ranktheoretic update rules.

The impossibility results of Bovens and Hartmann (2003, Bayesian epistemology. Oxford: Clarendon Press) and Olsson (2005, Against coherence: Truth, probability and justification. Oxford: Oxford University Press.) show that the link between coherence and probability is not as strong as some have supposed. This paper is an attempt to bring out a way in which coherence reasoning nevertheless can be justified, based on the idea that, even if it does not provide an infallible guide to probability, it can give us an (...) indication thereof. It is further shown that this actually is the case, for several of the coherence measures discussed in the literature so far. We also discuss how this affects the possibility to use coherence as a means of epistemic justification. (shrink)

This dissertation looks at a set of interconnected questions concerning the foundations of probability, and gives a series of interconnected answers. At its core is a piece of old-fashioned philosophical analysis, working out what probability is. Or equivalently, investigating the semantic question of what is the meaning of ‘probability’? Like Keynes and Carnap, I say that probability is degree of reasonable belief. This immediately raises an epistemological question, which degrees count as reasonable? To solve that in its full generality would (...) mean the end of human inquiry, so that won’t be attempted here. Rather I will follow tradition and merely investigate which sets of partial beliefs are coherent. -/- The standard answer to this question, what is commonly called the Bayesian answer, says that degrees of belief are coherent iff they form a probability function. I disagree with the way this is usually justified, but subject to an important qualification I accept the answer. The important qualification is that degrees of belief may be imprecise, or vague. Part one of the dissertation, chapters 1 to 6, looks largely at the consequences of this qualification for the semantic and epistemological questions already mentioned. It turns out that when we allow degrees of belief to be imprecise, we can discharge potentially fatal objections to some philosophically attractive theses. Two of these, that probability is degree of reasonable belief and that the probability calculus provides coherence constraints on partial beliefs, have been mentioned. Others include the claim, defended in chapter 4, that chance is probability given total history. -/- As well as these semantic and epistemological questions, studies of the foundations of probability usually include a detailed discussion of decision theory. For reasons set out in chapter 2, I deny we can gain epistemological insights from decision theory. Nevertheless, it is an interesting field to study on its own, and it might be expected that there would be decision theoretic consequences of allowing imprecise degrees of belief. As I show in part two, this expectation seems to be mistaken. Chapter 9 shows that there aren’t interesting consequences of this theory for decision theory proper, and chapters 10 and 11 show that Keynes’s attempt to use imprecision in degrees of belief to derive a distinctive theory of interest rates is unsound. -/- Chapters 7 and 8 provide a link between these two parts. In chapter 7 I look at some previous philosophical investigations into the effects of imprecision. In chapter 8 I develop what I take to be the best competitor to the theory defended here – a constructivist theory of probability. On this view degrees of belief are precise, but the relevant coherence constraint is a constructivist probability calculus. This view is, I think, mistaken, but the calculus has some intrinsic interest, and there are at least enough arguments for it to warrant a chapter-length examination. (shrink)

This fifth volume on Advances and Applications of DSmT for Information Fusion collects theoretical and applied contributions of researchers working in different fields of applications and in mathematics, and is available in open-access. The collected contributions of this volume have either been published or presented after disseminating the fourth volume in 2015 in international conferences, seminars, workshops and journals, or they are new. The contributions of each part of this volume are chronologically ordered. First Part of this book presents some (...) theoretical advances on DSmT, dealing mainly with modified Proportional Conflict Redistribution Rules (PCR) of combination with degree of intersection, coarsening techniques, interval calculus for PCR thanks to set inversion via interval analysis (SIVIA), rough set classifiers, canonical decomposition of dichotomous belief functions, fast PCR fusion, fast inter-criteria analysis with PCR, and improved PCR5 and PCR6 rules preserving the (quasi-)neutrality of (quasi-)vacuous belief assignment in the fusion of sources of evidence with their Matlab codes. Because more applications of DSmT have emerged in the past years since the apparition of the fourth book of DSmT in 2015, the second part of this volume is about selected applications of DSmT mainly in building change detection, object recognition, quality of data association in tracking, perception in robotics, risk assessment for torrent protection and multi-criteria decision-making, multi-modal image fusion, coarsening techniques, recommender system, levee characterization and assessment, human heading perception, trust assessment, robotics, biometrics, failure detection, GPS systems, inter-criteria analysis, group decision, human activity recognition, storm prediction, data association for autonomous vehicles, identification of maritime vessels, fusion of support vector machines (SVM), Silx-Furtif RUST code library for information fusion including PCR rules, and network for ship classification. Finally, the third part presents interesting contributions related to belief functions in general published or presented along the years since 2015. These contributions are related with decision-making under uncertainty, belief approximations, probability transformations, new distances between belief functions, non-classical multi-criteria decision-making problems with belief functions, generalization of Bayes theorem, image processing, data association, entropy and cross-entropy measures, fuzzy evidence numbers, negator of belief mass, human activity recognition, information fusion for breast cancer therapy, imbalanced data classification, and hybrid techniques mixing deep learning with belief functions as well. (shrink)

In a recent monograph, I advocated a new theory—the theory of belief functions—as an alternative to the Bayesian theory of epistemic probability. In this paper I compare the two theories in the context of a simple but authentic example of assessing evidence.The Bayesian theory is ostensibly the theory that assessment of evidence should proceed by conditioning additive probability distributions; this theory dates from the work of Bayes and Laplace in the second half of the eighteenth century. It is indisputably the (...) dominant theory of epistemic probability today.The theory of belief functions differs from the Bayesian theory in that it uses certain non-additive set functions in the place of additive probability distributions and in that it generalizes the rule of conditioning to a general rule for combining evidence. As a mathematical theory its apparent origin is rather recent and abrupt; it first appears in work of A. P. Dempster, published in the 1960’s. (shrink)

The received model of degrees of belief represents them as probabilities. Over the last half century, many philosophers have been convinced that this model fails because it cannot make room for the idea that an agent’s degrees of belief should respect the available evidence. In its place they have advocated a model that represents degrees of belief using imprecise probabilities (sets of probability functions). This paper presents a model of degrees of belief based on Dempster–Shafer belief functions and then presents (...) arguments for belief functions over imprecise probabilities as a model of evidence-respecting degrees of belief. The arguments cover three kinds of issue: theoretical virtues (simplicity, interpretability and flexibility); motivations; and problem cases (dilation and belief inertia). (shrink)

– We offer a new motivation for imprecise probabilities. We argue that there are propositions to which precise probability cannot be assigned, but to which imprecise probability can be assigned. In such cases the alternative to imprecise probability is not precise probability, but no probability at all. And an imprecise probability is substantially better than no probability at all. Our argument is based on the mathematical phenomenon of non-measurable sets. Non-measurable propositions cannot receive precise probabilities, but there is a natural (...) way for them to receive imprecise probabilities. The mathematics of non-measurable sets is arcane, but its epistemological import is far-reaching; even apparently mundane propositions are liable to be affected by non-measurability. The phenomenon of non-measurability dramatically reshapes the dialectic between critics and proponents of imprecise credence. Non-measurability offers natural rejoinders to prominent critics of imprecise credence. Non-measurability even reverses some of the critics’ arguments—by the very lights that have been used to argue against imprecise credences, imprecise credences are better than precise credences. (shrink)

This manuscript presents a topological argumentation framework for modelling notions of evidence-based (i.e., justified) belief. Our framework relies on so-called topological evidence models to represent the pieces of evidence that an agent has at her disposal, and it uses abstract argumentation theory to select the pieces of evidence that the agent will use to define her beliefs. The tools from abstract argumentation theory allow us to model agents who make decisions in the presence of contradictory information. Thanks to this, it (...) is possible to define two new notions of beliefs, grounded beliefs and fully grounded beliefs. These notions are discussed in this paper, analysed and compared with the existing notion of topological justified belief. This comparison revolves around three main issues: closure under conjunction introduction, the level of consistency and their logical strength. (shrink)

In the literature of belief revision, it is widely accepted that: there is only one revision phase in belief revision which is well characterized by the Bayes’ Rule, Jeffrey’s Rule, etc.. However, as I argue in this article, there are at least four successive phases in belief revision, namely first/second order evaluation and first/second order revision. To characterize these phases, I propose mainly four rules of belief revision based on agent’s criteria, and make one composition rule to characterize belief revision (...) as a whole. (shrink)

We explore the notion of a measure in a mereological structure and we deal with the difficulties arising. We show that measure theory on connection spaces is closely related to measure theory on the class of ortholattices and we present an approach akin to Dempster’s and Shafer’s. Finally, the paper contains some suggestions for further research.

In a recent paper Ronald Meester and Timber Kerkvliet argue by example that infinite epistemic regresses have different solutions depending on whether they are analyzed with probability functions or with belief functions. Meester and Kerkvliet give two examples, each of which aims to show that an analysis based on belief functions yields a different numerical outcome for the agent’s degree of rational belief than one based on probability functions. In the present paper we however show that the outcomes are the (...) same. The only way in which probability functions and belief functions can yield different solutions for the agent’s degree of belief is if they are applied to different examples, i.e. to different situations in which the agent finds himself. (shrink)

Some naturalistic philosophers of mind subscribing to the predictive processing theory of mind have adopted a realist attitude towards the results of Bayesian cognitive science. In this paper, we argue that this realist attitude is unwarranted. The Bayesian research program in cognitive science does not possess special epistemic virtues over alternative approaches for explaining mental phenomena involving uncertainty. In particular, the Bayesian approach is not simpler, more unifying, or more rational than alternatives. It is also contentious that the Bayesian approach (...) is overall better supported by the empirical evidence. So, to develop philosophical theories of mind on the basis of a realist interpretation of results from Bayesian cognitive science is unwarranted. Naturalistic philosophers of mind should instead adopt an anti-realist attitude towards these results and remain agnostic as to whether Bayesian models are true. For continuing on with an exclusive focus and praise of Bayes within debates about the predictive processing theory will impede progress in philosophical understanding of scientific practice in computational cognitive science as well as of the architecture of the mind. (shrink)

A widely shared view in the cognitive sciences is that discovering and assessing explanations of cognitive phenomena whose production involves uncertainty should be done in a Bayesian framework. One assumption supporting this modelling choice is that Bayes provides the best approach for representing uncertainty. However, it is unclear that Bayes possesses special epistemic virtues over alternative modelling frameworks, since a systematic comparison has yet to be attempted. Currently, it is then premature to assert that cognitive phenomena involving uncertainty are best (...) explained within the Bayesian framework. As a forewarning, progress in cognitive science may be hindered if too many scientists continue to focus their efforts on Bayesian modelling, which risks to monopolize scientific resources that may be better allocated to alternative approaches. (shrink)

It has been just over 100 years since the birth of Alan Turing and more than 65 years since he published in Mind his seminal paper, Computing Machinery and Intelligence. In the Mind paper, Turing asked a number of questions, including whether computers could ever be said to have the power of “thinking”. Turing also set up a number of criteria—including his imitation game—under which a human could judge whether a computer could be said to be “intelligent”. Turing’s paper, as (...) well as his important mathematical and computational insights of the 1930s and 1940s led to his popular acclaim as the “Father of Artificial Intelligence”. In the years since his paper was published, however, no computational system has fully satisfied Turing’s challenge. In this paper we focus on a different question, ignored in, but inspired by Turing’s work: How might the Artificial Intelligence practitioner implement “intelligence” on a computational device? Over the past 60 years, although the AI community has not produced a general-purpose computational intelligence, it has constructed a large number of important artifacts, as well as taken several philosophical stances able to shed light on the nature and implementation of intelligence. This paper contends that the construction of any human artifact includes an implicit epistemic stance. In AI this stance is found in commitments to particular knowledge representations and search strategies that lead to a product’s successes as well as its limitations. Finally, we suggest that computational and human intelligence are two different natural kinds, in the philosophical sense, and elaborate on this point in the conclusion. (shrink)

Methodological likelihoodism is the view that it is possible to provide an adequate self-contained methodology for science on the basis of likelihood functions alone. I argue that methodological likelihoodism is false by arguing that an adequate self-contained methodology for science provides good norms of commitment vis-a-vis hypotheses, articulating minimal requirements for a norm of this kind, and proving that no purely likelihood-based norm satisfies those requirements.

Both dilation and non-conglomerability have been alleged to conflict with a fundamental principle of Bayesian methodology that we call \textit{Good's Principle}: one should always delay making a terminal decision between alternative courses of action if given the opportunity to first learn, at zero cost, the outcome of an experiment relevant to the decision. In particular, both dilation and non-conglomerability have been alleged to permit or even mandate choosing to make a terminal decision in deliberate ignorance of relevant, cost-free information. Although (...) dilation and non-conglomerability share some similarities, some authors maintain that there are important differences between the two that warrant endorsing different normative positions regarding dilation and non-conglomerability. This article reassesses the grounds for treating dilation and non-conglomerability differently. Our analysis exploits a new and general characterization result for dilation to draw a closer connection between dilation and non-conglomerability. (shrink)