A Rehabilitation of the Principle of Insufficient Reason
AbstractIt is shown that two of the axioms necessary for the expected utility rule imply the Principle of Insufficient Reason. Whenever a decision maker knows the possible states of the world, but completely lacks information about the plausibility of each single state, he has to behave as if all states occurred with the same objective probability, known with certainty. The result is applied to decision trees and used to solve a problem formulated by Savage in order to discredit the classical version of the Principle of Insufficient Reason.
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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 19914.
Date of creation: 1980
Date of revision:
Publication status: Published in The Quarterly Journal of Economics 3 94(1980): pp. 493
Other versions of this item:
- Sinn, Hans-Werner, 1980. "A Rehabilitation of the Principle of Insufficient Reason," The Quarterly Journal of Economics, MIT Press, vol. 94(3), pages 493-506, May.
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