Daniel Ellsberg and the Validation of Normative Propositions
Forthcoming in Œconomia – History / Methodology / Philosophy
18 Pages Posted: 9 Feb 2016
Date Written: December 1, 2015
In the history of decision theory Daniel Ellsberg is known because his seminal paper “Risk, ambiguity and the Savage axioms” presented the counterexample to Bayesian decision-making that got the normative value of the theory into trouble. An assessment of Ellsberg’s contribution in the more encompassing framework of his long unnoticed 1962 doctoral thesis suggests that, although he did not take part to the ensuing debate, Ellsberg provided a thorough philosophical and methodological background for his critique of Savage’s axiomatization of decision theory. By concentrating mainly on Ellsberg’s analysis of decision-making in his thesis, this paper examines the way he conceived of the possibility to test normative propositions and tries to identify the kind of normative value he attributed to his own suggested solution for the Ellsberg Paradox.
Keywords: decision-making, ambiguity, Ellsberg Paradox
JEL Classification: B21, B41, D81
Suggested Citation: Suggested Citation