Shackle and Modern Decision Theory

38 Pages Posted: 27 Apr 2009

See all articles by Marcello Basili

Marcello Basili

University of Siena - Dipartimento di Economia Politica; University of Siena - Department of Economic Policy, Finance and Development

Carlo Zappia

University of Siena - Department of Economics and Statistics

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Abstract

The paper discusses the role of George L.S. Shackle in fostering an unconventional approach to individual decision making. Up until the early 1970s Shackle was the single critic of the probabilistic approach to decision making who proposed an alternative formal corpus for dealing with uncertainty. The main aim of the paper is to analyse Shackle's non-probabilistic conceptualization of individual decisions under uncertainty from a specific viewpoint, namely that of a possible connection between his theory and one of the most interesting recent approaches to decision under uncertainty, the so-called non-additive probability approach of Gilboa and Schmeidler. The paper shows that these developments in modern decision theory take Shackle's issue seriously and confirm that the reliance of strict Bayesian theory on probabilistic judgements based on point-probability estimates, a reliance that Shackle intended to oppose, is untenable. Non-additive decision theory also provides a usage of non-additive probability distributions in choice that is an alternative to Shackle's approach of using a qualitative notion of probability, such as potential surprise.

Suggested Citation

Basili, Marcello and Zappia, Carlo, Shackle and Modern Decision Theory. Metroeconomica, Vol. 60, Issue 2, pp. 245-282, May 2009, Available at SSRN: https://ssrn.com/abstract=1378399 or http://dx.doi.org/10.1111/j.1467-999X.2008.00333.x

Marcello Basili (Contact Author)

University of Siena - Dipartimento di Economia Politica ( email )

Piazza San Francesco 7
Siena, 53100
Italy

University of Siena - Department of Economic Policy, Finance and Development ( email )

Piazza San Francesco, 7
Siena, 53100
Italy

Carlo Zappia

University of Siena - Department of Economics and Statistics ( email )

Piazza San Francesco 7
Siena, Siena 53100
Italy

HOME PAGE: http://docenti-deps.unisi.it/carlozappia/

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