Capacity Updating Rules and Rational Belief Change

Abstract

Choquet expected utility substitutes capacities for subjective probabilities to explain uncertainty aversion and related phenomena. This paper studies capacities as models of belief. The notions of inner and outer acceptance context are defined. These are shown to be the natural acceptance contexts when belief expansion is described by naïve Bayesian and Dempster-Shafer updating of capacities respectively. We also show that Eichberger and Kelsey's (1999b) use of Dempster-Shafer updating as a model of belief revision may lead to violations of the AGM axioms for rational belief change. Show more