AGM-theory, named after its founders Carlos Alchourrón, Peter Gärdenfors and David Makinson, is the leading contemporary paradigm in the theory of belief-revision. The theory is reformulated here so as to deal with the central relational notions ‘J is a contraction of K with respect to A’ and ‘J is a revision of K with respect to A’. The new theory is based on a principal-case analysis of the domains of definition of the three main kinds of theory-change (expansion, contraction and revision). The new theory is stated by means of introduction and elimination rules for the relational notions. In this new setting one can re-examine the relationship between contraction and revision, using the appropriate versions of the so-called Levi and Harper identities. Among the positive results are the following. One can derive the extensionality of contraction and revision, rather than merely postulating it. Moreover, one can demonstrate the existence of revision-functions satisfying a principle of monotonicity. The full set of AGM-postulates for revision-functions allow for completely bizarre revisions. This motivates a Principle of Minimal Bloating, which needs to be stated as a separate postulate for revision. Moreover, contractions obtained in the usual way from the bizarre revisions, by using the Harper identity, satisfy Recovery. This provides a new reason (in addition to several others already adduced in the literature) for thinking that the contraction postulate of Recovery fails to capture the Principle of Minimal Mutilation. So the search is still on for a proper explication of the notion of minimal mutilation, to do service in both the theory of contraction and the theory of revision. The new relational formulation of AGM-theory, based on principal-case analysis, shares with the original, functional form of AGM-theory the idealizing assumption that the belief-sets of rational agents are to be modelled as consistent, logically closed sets of sentences. The upshot of the results presented here is that the new relational theory does a better job of making important matters clear than does the original functional theory. A new setting has been provided within which one can profitably address two pressing questions for AGM-theory: (1) how is the notion of minimal mutilation (by both contractions and revisions) best analyzed? and (2) how is one to rule out unnecessary bloating by revisions?
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