Rationality Under Uncertainty: Classic and Current Criticisms of the Bayesian Viewpoint

Forthcoming in The European Journal of the History of Economic Thought

33 Pages Posted: 4 Oct 2018

See all articles by Carlo Zappia

Carlo Zappia

University of Siena - Department of Economics and Statistics

Date Written: September 1, 2018

Abstract

At 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.

Keywords: Rationality, Uncertainty, Decision Theory, Ellsberg Paradox

JEL Classification: B21, B41, D80

Suggested Citation

Zappia, Carlo, Rationality Under Uncertainty: Classic and Current Criticisms of the Bayesian Viewpoint (September 1, 2018). Forthcoming in The European Journal of the History of Economic Thought , Available at SSRN: https://ssrn.com/abstract=3220431

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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