Economic Theory

, Volume 20, Issue 1, pp 47–65 | Cite as

What do uncertainty-averse decision-makers believe?

  • Matthew J. Ryan
Research Articles


This paper introduces the concept of firm belief, which is proposed as a new epistemic model for a wide class of preferences. In particular, firm beliefs are shown to have the following desirable properties: (i) they are derived from preferences according to a plausible rule of epistemic inference; (ii) they satisfy standard logical properties; and (iii) tractable representations of firm belief are available for all (suitably continuous) biseparable preferences [13, 14], including the Choquet expected utility [30] and maxmin expected utility [16] classes. We also use firm belief to construct a generalization of Nash equilibrium for (two-player) normal form games.

Keywords and Phrases: Epistemic foundations of decisions, Biseparable preferences, Normal form games. 
JEL Classification Numbers: C72, D81. 


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Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Matthew J. Ryan
    • 1
  1. 1.School of Economics, The Australian National University, Canberra, ACT 0200, AUSTRALIA (e-mail: AU

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