Probabilistic Versus Non-Probabilistic Decision Making: Savage, Shackle and Beyond

University of Siena Economics Working Paper No. 403

25 Pages Posted: 12 Jan 2004

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

Date Written: October 2003

Abstract

This paper discusses the evolution of decision theory after Savage's Foundations. Two developments are examined. First, it is presented the rationale of Shackle's proposal to abandon probabilistic decision making. Second, it is discussed the axiomatisation provided by the non-additive probability approach to account for the experimental evidence originated by the Ellsberg Paradox. An attempt is made to establish a connection between Shackle's non-probabilistic instances and non-additive probabilistic decision making. The main outgrowth of the paper is that the similarities between the non-additive approach and Shackle's theory are not limited to a number of methodological statements. In fact, it is also the formal measures used in the two contexts for representing individual preferences in uncertain environments that resemble each other.

Keywords: uncertainty, decision theory, non-additive probabilities

JEL Classification: B21, D81

Suggested Citation

Basili, Marcello and Zappia, Carlo, Probabilistic Versus Non-Probabilistic Decision Making: Savage, Shackle and Beyond (October 2003). University of Siena Economics Working Paper No. 403, Available at SSRN: https://ssrn.com/abstract=480763 or http://dx.doi.org/10.2139/ssrn.480763

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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