Knightian Decision Theory: Part 1

A theory of choice under uncertainty is proposed which removes the completeness assumption from the Anscombe-Aumann formulation of Savage's theory and introduces an inertia assumption. The inertia assumption is that there is such a thing as the status quo and an alternative is accepted only if it is preferred to the status quo. This theory is one way of giving rigorous expression to Frank Knight's distinction between risk and uncertainty.

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Year of publication:	1986-11
Authors:	Bewley, Truman F.
Institutions:	Cowles Foundation for Research in Economics, Yale University
Subject:	Decision theory \| Knight \| theory of choice \| uncertainty \| inertia assumption

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Extent:	application/pdf
Series:	Cowles Foundation Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	CFP 1053 Published in Decisions in Economics and Finance (2002), 25(2): 79-110 The price is None Number 807 54 pages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004990797