1,720,990 research outputs found
Keyne's Treatise on Probability at 100 years: its most enduring message
Full text linkOn the occasion of the assessment of the enduring influence of Keynes’s Treatise on Probability at 100 years, this paper focuses on its relevance for decision theory. The paper places emphasis on Keynes’s introduction of the epistemic notion of probabilities that often are non-numerical, as a theoretical object intended to replace frequency probabilities. The paper argues that, as non-numerical probabilities make it possible to deal with uncertainty as if individuals were endowed with interval-valued probabilities, Keynes’s 1921 critique of contemporary frequency probability theory turns out to be relevant also with regard to the yet to be established subjective probability theory. Although non-numerical probabilities were used by Keynes to criticize the contemporary application of probability to conduct, it must be acknowledged that, still today, they may constitute an appropriate tool for decision-making when confronting uncertainty, as he hinted at in his late 1930s correspondence with Hugh Townshend
A Comment on Donald Gillies’s «Difficulties in the Logical Interpretation of Probability»
Full text linkThe paper comments on Donald Gillies's views of Keynes's probability theor
From Knightian to Keynesian uncertainty: contextualising Ellsberg's ambiguity
No full textThis paper argues that Daniel Ellsberg regarded the urn examples and conception of ambiguity presented in his famous 1961 paper as merely a step towards the analysis of more fundamental forms of uncertainty. Drawing on what is known about Ellsberg's activities during the 1950s and early 1960s, it is shown that, after starting his project as one of reviving Frank Knight's ideas about uncertainty, Ellsberg went on to realise that his position was in fact rather closer to that of John Maynard Keynes in his A Treatise on Probability. Furthermore, it is shown that formerly classified research Ellsberg undertook in the early 1960s also reveals an abiding influence in fundamental uncertainty
A Comment on Anna Carabelli’s «Keynes’s Uncertainty as a Tragic Rational Dilemma»
Full text linkThe paper comments on Anna Carabelli's view on Keynes's probability theor
Non-Bayesian decision theory ahead of its time: the case of G. L. S. Shackle
No full textThis article deals with the reception of George L. S. Shackle’s volume Expectation in Economics, introducing a unique attempt to discard the probability framework in the investigation of behaviour under uncertainty. Through a fresh reading of the textual evidence, including correspondence held at Cambridge University Library, the article assesses why decision theorists’ interest in Shackle’s theory, substantial during the 1950s, faded away in the early 1960s. The article argues that, apart from Shackle’s refusal to comprehend that his critics were under the influence of a new subjective probability perspective, a major explanation of the dismissal of his work stays in Shackle’s stance not to establish a collaborative link with those critics who showed a positive attitude towards his theory. The article shows, though, that the discussion between Shackle and his critics hinged on a number of topics that are still crucial to the current developments of decision theory
Rationality under uncertainty: classic and current criticisms of the Bayesian viewpoint
Full text linkAt least since Leonard Savage’s extension of von Neumann and Morgenstern’s expected utility, rational choice theory has been interpreted as a theory prescribing what individuals should do in any decision context, ranging from certainty to risk and uncertainty. After decades this received view, usually termed Bayesian, has been criticized for its normative content. This paper compares the current critique of the notion of Bayesian rationality, proposed by Itzhak Gilboa, with Daniel Ellsberg’s classic critique of Savage’s understanding of rationality. The paper argues that Ellsberg’s classic analysis of Savage’s theory totally anticipated today’s criticism
Keynes’s Treatise on Probability at 100: A Symposium. Introduction
Full text linkThis paper introduces the symposium reproducing the four papers presented at the STOREP 2021 Annual Conference, in the virtual session especially dedicated to celebrate the centennial anniversary of the Treatise. The papers testify well to the diversity of views about the significance of Keynes’s volume for both the probability theory and the main theme in Keynes’s economics, namely, the pervasiveness of uncertainty in the economy and its substantial neglect by «classical» economists
On measurable uncertainty and the fight for taking uncertainty seriously in economics
Full text linkThis paper discusses the engagement of economists with the issue of the measurability of uncertainty.
Since Knight’s seminal distinction between risk, intended as measurable uncertainty, and
unmeasurable uncertainty, the question has been to what extent the extension of the theory of choice
from certainty to risk through von Neumann and Morgenstern’s expected utility hypothesis would
allow dealing with uncertain events. The paper develops from a study of the rationale underlying the
theories of those authors who objected to the mainstream view that the axiomatic approach developed
in the early 1950s, mainly through Leonard Savage’s generalization of expected utility, makes it,
indeed, possible to reduce uncertainty to risk. After a summary of the meaning attributed by authors
such as Knight, Keynes, Shackle and Ellsberg to the contention that uncertainty is irreducible to risk
and unmeasurable, the paper aims to investigate why this view did not emerge as a significant
alternative to the mainstream up until recently. A main reason, at times alluded to but never openly
discussed in the literature, is shown to be the close link between Savage and the group of decision
theorists at the Cowles Commission for Research in Economics under the directorship of Jacob
Marschak and Tjalling Koopmans. Archival evidence suggests that arguing that a theory of decision
under uncertainty could be developed on the basis of “axioms that seem unobjectionable,” as
Koopmans put it, was indeed an integral part of the attempt undertook at Cowles to move forward in
economic theory by prioritizing scientific rigour in the form of mathematical models engaging with
new mathematical tools
The notion of private information in a modern perspective: a re-appraisal of Hayek’s contribution
No full textHayek's main ideas about the competitive mechanism and private information are compared with recent developments in economic theory. The paper argues that they differ because of the kind of knowledge they refer to, that is, to knowledge that cannot be verified ex-post. From this analysis it is possible to conclude that Hayek's notion of equilibrium entails neither Pareto optimal properties nor full information efficiency
Introduction to the STOREP symposium
No full textThe paper introduces the essays presented at the 2019 Annual Meeting of the STOREP Society that were selected for publication in a Symposium hosted by the Review of Political Econom
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