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Bets on hats: on Dutch books against groups, degrees of belief as betting rates, and group-reflection

Bovens, Luc and Rabinowicz, Wlodek (2011) Bets on hats: on Dutch books against groups, degrees of belief as betting rates, and group-reflection. Episteme, 8 (3). pp. 281-300. ISSN 1742-3600

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Abstract

The Story of the Hats is a puzzle in social epistemology. It describes a situation in which a group of rational agents with common priors and common goals seems vulnerable to a Dutch book if they are exposed to different information and make decisions independently. Situations in which this happens involve violations of what might be called the Group-Reflection Principle. As it turns out, the Dutch book is flawed. It is based on the betting interpretation of the subjective probabilities, but ignores the fact that this interpretation disregards strategic considerations that might influence betting behavior. A lesson to be learned concerns the interpretation of probabilities in terms of fair bets and, more generally, the role of strategic considerations in epistemic contexts. Another lesson concerns Group-Reflection, which in its unrestricted form is highly counter-intuitive. We consider how this principle of social epistemology should be re-formulated so as to make it tenable.

Item Type: Article
Official URL: http://journals.cambridge.org/action/displayJourna...
Additional Information: © 2011 Cambridge University Press
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C44 - Statistical Decision Theory; Operations Research
C - Mathematical and Quantitative Methods > C5 - Econometric Modeling
C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C53 - Forecasting and Other Model Applications
Sets: Departments > Philosophy, Logic and Scientific Method
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 15 Apr 2013 13:52
URL: http://eprints.lse.ac.uk/49667/

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