Savage denied that Bayesian decision theory applies in large worlds. This paper proposes a minimal extension of Bayesian decision theory to a large-world context that evaluates an event E\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$E$$\end{document} by assigning it a number π\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$\pi $$\end{document} that reduces to an orthodox probability for a class of measurable events. The Hurwicz criterion evaluates π\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$\pi $$\end{document} (...) as a weighted arithmetic mean of its upper and lower probabilities, which we derive from the measurable supersets and subsets of E\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$E$$\end{document}. The ambiguity aversion reported in experiments on the Ellsberg paradox is then explained by assigning a larger weight to the lower probability of winning than to the upper probability. However, arguments are given here that would make anything but equal weights irrational when using the Hurwicz criterion. The paper continues by embedding the Hurwicz criterion in an extension of expected utility theory that we call expectant utility. (shrink)

Can the output of human cognition be predicted from the assumption that it is an optimal response to the information-processing demands of the environment? A methodology called rational analysis is described for deriving predictions about cognitive phenomena using optimization assumptions. The predictions flow from the statistical structure of the environment and not the assumed structure of the mind. Bayesian inference is used, assuming that people start with a weak prior model of the world which they integrate with experience to develop (...) stronger models of specific aspects of the world. Cognitive performance maximizes the difference between the expected gain and cost of mental effort. Memory performance can be predicted on the assumption that retrieval seeks a maximal trade-off between the probability of finding the relevant memories and the effort required to do so; in categorization performance there is a similar trade-off between accuracy in predicting object features and the cost of hypothesis formation; in casual inference the trade-off is between accuracy in predicting future events and the cost of hypothesis formation; and in problem solving it is between the probability of achieving goals and the cost of both external and mental problem-solving search. The implemention of these rational prescriptions in neurally plausible architecture is also discussed. (shrink)

This is a brief review of issues over which Henry Kyburg and I differed concerning the requirement that full beliefs should be closed under deductive consequence.

We generalize the Kolmogorov axioms for probability calculus to obtain conditions defining, for any given logic, a class of probability functions relative to that logic, coinciding with the standard probability functions in the special case of classical logic but allowing consideration of other classes of "essentially Kolmogorovian" probability functions relative to other logics. We take a broad view of the Bayesian approach as dictating inter alia that from the perspective of a given logic, rational degrees of belief are those representable (...) by probability functions from the class appropriate to that logic. Classical Bayesianism, which fixes the logic as classical logic, is only one version of this general approach. Another, which we call Intuitionistic Bayesianism, selects intuitionistic logic as the preferred logic and the associated class of probability functions as the right class of candidate representions of epistemic states (rational allocations of degrees of belief). Various objections to classical Bayesianism are, we argue, best met by passing to intuitionistic Bayesianism—in which the probability functions are taken relative to intuitionistic logic—rather than by adopting a radically non-Kolmogorovian, for example, nonadditive, conception of (or substitute for) probability functions, in spite of the popularity of the latter response among those who have raised these objections. The interest of intuitionistic Bayesianism is further enhanced by the availability of a Dutch Book argument justifying the selection of intuitionistic probability functions as guides to rational betting behavior when due consideration is paid to the fact that bets are settled only when/if the outcome bet on becomes known. (shrink)

This paper aims to make explicit the methodological conditions that should be satisfied for the Bayesian model to be used as a normative model of human probability judgment. After noticing the lack of a clear definition of Bayesianism in the psychological literature and the lack of justification for using it, a classic definition of subjective Bayesianism is recalled, based on the following three criteria: an epistemic criterion, a static coherence criterion and a dynamic coherence criterion. Then it is shown that (...) the adoption of this framework has two kinds of implications. The first one regards the methodology of the experimental study of probability judgment. The Bayesian framework creates pragmatic constraints on the methodology that are linked to the interpretation of, and the belief in, the information presented, or referred to, by an experimenter in order for it to be the basis of a probability judgment by individual participants. It is shown that these constraints have not been satisfied in the past, and the question of whether they can be satisfied in principle is raised and answered negatively. The second kind of implications consists of two limitations in the scope of the Bayesian model. They regard (1) the background of revision (the Bayesian model considers only revising situations but not updating situations), and (2) the notorious case of the null priors. In both cases Lewis’ rule is an appropriate alternative to Bayes’ rule, but its use faces the same operational difficulties. (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 ...

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)

The object of this paper is to show why recent research in the psychology of deductive and probabilistic reasoning does not have.

As climate policy decisions are decisions under uncertainty, being based on a range of future climate change scenarios, it becomes a crucial question how to set up this scenario range. Failing to comply with the precautionary principle, the scenario methodology widely used in the Third Assessment Report of the International Panel on Climate Change (IPCC) seems to violate international environmental law, in particular a provision of the United Nations Framework Convention on Climate Change. To place climate policy advice on a (...) sound methodological basis would imply that climate simulations which are based on complex climate models had, in stark contrast to their current hegemony, hardly an epistemic role to play in climate scenario analysis at all. Their main function might actually consist in ‘foreseeing future ozone-holes’. In order to argue for these theses, I explain first of all the plurality of climate models used in climate science by the failure to avoid the problem of underdetermination. As a consequence, climate simulation results have to be interpreted as modal sentences, stating what is possibly true of our climate system. This indicates that climate policy decisions are decisions under uncertainty. Two general methodological principles which may guide the construction of the scenario range are formulated and contrasted with each other: modal inductivism and modal falsificationism. I argue that modal inductivism, being the methodology implicitly underlying the third IPCC report, is severely flawed. Modal falsificationism, representing the sound alternative, would in turn require an overhaul of the IPCC practice. (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)

The recently formed French School of the “économie des conventions” have claimed that they are developing a revolutionary new approach to the social sciences. This group of researchers in economics, philosophy, sociology, law and history attempt to transcend the inherited analytical frameworks of structural-functionalist sociology and neoclassical economics and provide an alternative picture of the social world. This article will investigate some of these claims in detail. First, I trace the cohesion of the Convention School's ideas around the key concept (...) of convention. Conventionalist theory reflects an ontological shift towards the recognition of intersubjectivity. This shift leads to tension between the advocacy of methodological individualism on the one hand and the use of convention as a central analytical category on the other. (shrink)

In this paper we investigate three approaches to iterated contraction, namely: the Moderate (or Priority) contraction, the Natural (or Conservative) contraction, and the Lexicographic contraction. We characterise these three contraction functions using certain, arguably plausible, properties of an iterated contraction function. While we provide the characterisation of the first two contraction operations using rationality postulates of the standard variety for iterated contraction, we found doing the same for the Lexicographic contraction more challenging. We provide its characterisation using a variation of (...) Epistemic ranking function instead. (shrink)

(2014). Epistemological foundations for the assessment of risks in banking and finance. Journal of Economic Methodology: Vol. 21, No. 2, pp. 125-138. doi: 10.1080/1350178X.2014.907438.