After the Crisis: Financial Economics and Decision Theory

HISTORY OF ECONOMIC THOUGHT AND POLICY, Forthcoming

18 Pages Posted: 28 Mar 2012

See all articles by Carlo Zappia

Carlo Zappia

University of Siena - Department of Economics and Statistics

Date Written: March, 26 2012

Abstract

This paper reviews the classics of financial economics with the benefit of insight offered by the recent financial crisis. The failure of mainstream financial models to explain the observed behavior of markets is put in relation with Itzhak Gilboa’s critique of the decisional model used for assessing choice under uncertainty. The paper argues that Gilboa’s attempt to develop an alternative theory of decision under uncertainty has a clear Keynesian derivation.

Keywords: financial markets, decision theory, uncertainty

JEL Classification: B26, D81, G11

Suggested Citation

Zappia, Carlo, After the Crisis: Financial Economics and Decision Theory (March, 26 2012). HISTORY OF ECONOMIC THOUGHT AND POLICY, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2028902

Carlo Zappia (Contact Author)

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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