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Decision under normative uncertainty

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  • Dietrich, Franz
  • Jabarian, Brian

Abstract

While ordinary decision theory focuses on empirical uncertainty, real decision-makers also face normative uncertainty: uncertainty about value itself. From a purely formal perspective, normative uncertainty is comparable to (Harsanyian or Rawlsian) identity uncertainty in the ‘original position’, where one’s future values are unknown. A comprehensive decision theory must address twofold uncertainty – normative and empirical. We present a simple model of twofold uncertainty, and show that the most popular decision principle – maximizing expected value (‘Expectationalism’) – has different formulations, namely Ex-Ante Expectationalism, Ex-Post Expectationalism, and hybrid theories. These alternative theories recommend different decisions, reasoning modes, and attitudes to risk. But they converge under an interesting (necessary and sufficient) condition.

Suggested Citation

  • Dietrich, Franz & Jabarian, Brian, 2022. "Decision under normative uncertainty," Economics and Philosophy, Cambridge University Press, vol. 38(3), pages 372-394, November.
  • Handle: RePEc:cup:ecnphi:v:38:y:2022:i:3:p:372-394_3
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    Cited by:

    1. Zou, Wenbo & Gao, Wenzheng, 2023. "Measuring the welfare and spillover effects of rank information," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 187-220.
    2. Cecchini, Mathilde, 2024. "Into the Unknown - Conceptualizing Citizens' Experiences of Uncertainty in Citizen-state Interactions," OSF Preprints 96pjt, Center for Open Science.

    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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