{"title":"Conditional hypothesis testing systems","authors":"Xiao Luo , Xuewen Qian","doi":"10.1016/j.jmateco.2025.103156","DOIUrl":null,"url":null,"abstract":"<div><div>We introduce the notion of a Conditional Hypothesis Testing System (CHTS) that specifies the concrete mode of non-Bayesian reactions to unexpected news in a conditional world. We show that Ortoleva’s (2012) Hypothesis Testing Model (HTM) has an alternative CHTS representation, and thus Ortoleva’s axioms also characterize CHTS. We demonstrate the concept of CHTS can be used to derive the conditional-probability-system expected utility model of Myerson (1986a). In addition, we formulate and show that the CHTS updating rule is order independent—i.e., the order of receiving uncontradictory information never influences the final posterior under the updating rule in all conditioning events. Our study sheds light on the (coherent) dynamic structure of HTM in all conditional worlds.</div></div>","PeriodicalId":50145,"journal":{"name":"Journal of Mathematical Economics","volume":"120 ","pages":"Article 103156"},"PeriodicalIF":0.7000,"publicationDate":"2025-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Mathematical Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0304406825000734","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We introduce the notion of a Conditional Hypothesis Testing System (CHTS) that specifies the concrete mode of non-Bayesian reactions to unexpected news in a conditional world. We show that Ortoleva’s (2012) Hypothesis Testing Model (HTM) has an alternative CHTS representation, and thus Ortoleva’s axioms also characterize CHTS. We demonstrate the concept of CHTS can be used to derive the conditional-probability-system expected utility model of Myerson (1986a). In addition, we formulate and show that the CHTS updating rule is order independent—i.e., the order of receiving uncontradictory information never influences the final posterior under the updating rule in all conditioning events. Our study sheds light on the (coherent) dynamic structure of HTM in all conditional worlds.
期刊介绍:
The primary objective of the Journal is to provide a forum for work in economic theory which expresses economic ideas using formal mathematical reasoning. For work to add to this primary objective, it is not sufficient that the mathematical reasoning be new and correct. The work must have real economic content. The economic ideas must be interesting and important. These ideas may pertain to any field of economics or any school of economic thought.