Mathematical Alternatives to Standard Probability that Provide Selectable Degrees of Precision

This chapter challenges the nearly universal reliance upon standard mathematical probability for mathematical modeling of chance and uncertain phenomena, and offers four alternatives. In standard practice, precise assignments are made inappropriately, even to the occurrences of events that may be unobservable in principle. Four familiar examples of chance or uncertain phenomena are discussed, about which this is true. The theory of measurement provides an understanding of the relationship between the accuracy of information and the precision with which the phenomenon under examination should be modeled mathematically. The model of modal or classificatory probability offers the least precision. Comparative probability, plausibility/belief functions and upper/lower probabilities are carefully considered. The selectable precision of these alternative mathematical models of chance and uncertainty makes for an improved range of levels of accuracy in modeling the empirical domain phenomena of chance, uncertainty, and indeterminacy. Knowledge of such models encourages further thought in this direction.

On Games and Equilibria with Coherent Lower Expectations

Different solution concepts for strategic form games have been introduced in order to weaken the consistency assumption that players’ beliefs, about their opponents strategic choices, are correct in equilibrium. The literature has shown that ambiguous beliefs are an appropriate device to deal with this task. In this note, we introduce an equilibrium concept in which players do not know the opponents’ strategies in their entirety but only thecoherent lower expectationsof some random variables that depend on the actual strategies taken by the others. This equilibrium concept generalizes the already existing concept of equilibrium with partially specified probabilities by extending the set of feasible beliefs and allowing for comparative probability judgements. We study the issue of the existence of the equilibrium points in our framework and find sufficient conditions which involve the continuity of coherent lower expectations and a Slater-like condition for the systems of inequalities defining beliefs.