Decision-making under uncertainty as drama: Keynesian and Shacklean themes in three of Shakespeare's tragedies

G.L.S. Shackle pointed out that Keynes's main methodological innovation was to approach economic processes through the eyes of agents while orthodox theory assumed the position of the omniscient external observer. It was this demarche that allowed Keynes to understand the full implications of the uncertainty that surrounds decision-making. Keynes proposed that rational calculation can only tell part of the story if the information necessary to allow calculation is not (and cannot be) available. Subjective factors, summarized by Keynes in the expression "animal spirits," are also important. But economic decisions are not unique in being subjected to uncertainty. Examining thought processes involved in decision-making in other dimensions of life can be illuminating. Few authors, if any, have explored this theme as masterly as Shakespeare. The paper focuses on three of his tragedies--Hamlet, Macbeth, and Julius Caesar--to show how intellectual and subjective elements are combined in the decision processes described in each play. Each play illuminates different problems that have to be approached by any meaningful theory of decision-making under uncertainty.