Ellsberg Rules and Keynes’s State of Long-Term Expectation: More Than an Accordance
AbstractThis paper advances an intuitive way to represent Keynes’s notion of long-term expectation. The epsilon-contamination approach is introduced and a rational and coherent decision rule is derived. The result is evidence that Ellsberg and Keynes share the notion of uncertainty and adopt the same class of decision rules.
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Bibliographic InfoPaper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 685.
Date of creation: Sep 2013
Date of revision:
Keynes; Ellsberg; expectation; consensus distribution; uncertainty; epsilon-contamination.;
Find related papers by JEL classification:
- B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-29 (All new papers)
- NEP-PKE-2013-11-29 (Post Keynesian Economics)
- NEP-UPT-2013-11-29 (Utility Models & Prospect Theory)
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