Institute of Economic Research, Kyoto University, Kyoto 606-8501, Japan; Department of Economics, Hiroshima University of Economics, 5-37-1, Gion, Asaminami-Ku, Hiroshima 731-0138, Japan
Abstract:
Eichberger et al. (2007) characterize the full Bayesian update rule for capacities. This paper shows that a conditional preference relation represented by the Choquet expected utility with respect to the updated capacity through the rule does not satisfy the axiom of Conditional Certainty Equivalence Consistency. A counterexample is provided and it is proved that a relaxation of the axiom maintains their results.