Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: May, 2006, Volume 74, Issue 3

Event Exchangeability: Probabilistic Sophistication Without Continuity or Monotonicity
p. 771-786

Chew Soo Hong, Jacob S. Sagi

Building on the Ramsey–de Finetti idea of event exchangeability, we derive a characterization of probabilistic sophistication without requiring any of the various versions of monotonicity, continuity, or comparative likelihood assumptions imposed by Savage (1954), Machina and Schmeidler (1992), and Grant (1995). Our characterization identifies a unique and finitely‐additive subjective probability measure over an algebra of events.

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