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Non-Bayesian decision theory ante-litteram: the case of G. L. S. Shackle

  • Carlo Zappia

    ()

This paper deals with the intellectual environment in which George L. S. Shackle’s theory of decision making was formulated and first discussed. Shackle’s approach had a great impact on decision theory in late 1940s and early 1950s being the single formalised attempt to discard the probability framework in the description of behaviour under uncertainty - a goal shared by Knight and Keynes. Against Shackle, Arrow defended the use of probability theory in decision making, by denying that the Knightian distinction between risk and uncertainty had any behavioural significance, and paving the way to Savage’s Foundations of Statistics as the new mainstream reference. Through an assessment of the reception of Shackle’s theory the paper presents the way a number of theoretical economists, psychologists, and mathematicians were interested in the viability of a formally structured alternative to theories of behaviour using probability statements to describe uncertainty. The paper aim to show that the lively but concentrated discussion on alternative decisional criteria Shackle was part of is crucial to understand the multifarious developments observed in modern decision theory in the last twenty years or so. Indeed, as discussed in a twin paper by Basili and Zappia, Shackle’s theory was a much more viable alternative to subjective expected utility than both its contemporary critics and modern decision theorists have recognised.

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Paper provided by Department of Economic Policy, Finance and Development (DEPFID), University of Siena in its series Department of Economic Policy, Finance and Development (DEPFID) University of Siena with number 0408.

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Date of creation: Jun 2008
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Handle: RePEc:usi:depfid:0408
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  1. Lachmann, Ludwig M, 1976. "From Mises to Shackle: An Essay on Austrian Economics and the Kaleidic Society," Journal of Economic Literature, American Economic Association, vol. 14(1), pages 54-62, March.
  2. Vaughn,Karen I., 1994. "Austrian Economics in America," Cambridge Books, Cambridge University Press, number 9780521445528, November.
  3. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  4. Marcello Basili & Carlo Zappia, 2007. "The weight of argument and non-additive measures: a note," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 003, Department of Economic Policy, Finance and Development (DEPFID), University of Siena.
  5. Itzhak Gilboa & David Schmeidler, 1994. "Additive Representations of Non-Additive Measures and the Choquet Integral," Post-Print hal-00753149, HAL.
  6. Kelsey, D., 1991. "Choice Under Partial Uncertainty," Discussion Papers 91-19, Department of Economics, University of Birmingham.
  7. Coddington, Alan, 1982. "Deficient Foresight: A Troublesome Theme in Keynesian Economics," American Economic Review, American Economic Association, vol. 72(3), pages 480-87, June.
  8. Ramsey, Frank P., 1926. "Truth and Probability," Histoy of Economic Thought Chapters, in: Braithwaite, R. B. (ed.), The Foundations of Mathematics and other Logical Essays, chapter 7, pages 156-198 McMaster University Archive for the History of Economic Thought.
  9. Marcello Basili & Carlo Zappia, 2009. "Shackle And Modern Decision Theory," Metroeconomica, Wiley Blackwell, vol. 60(2), pages 245-282, 05.
  10. Paul Davidson, 1983. "Rational Expectations: A Fallacious Foundation for Studying Crucial Decision-Making Processes," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 5(2), pages 182-198, January.
  11. Quiggin, J. & Kelsey, D., 1991. "Theories of Choice Under Ignorance and Uncertainty," Discussion Papers 91-17, Department of Economics, University of Birmingham.
  12. G. L. S. Shackle, 1942. "A Theory Of Investment-Decisions," Oxford Economic Papers, Oxford University Press, vol. 0(1), pages 77-94.
  13. G. L. S. Shackle, 1940. "A Reply to Professor Hart," Review of Economic Studies, Oxford University Press, vol. 8(1), pages 54-57.
  14. F. H. Hahn, 1955. "Uncertainty and the Cobweb," Review of Economic Studies, Oxford University Press, vol. 23(1), pages 65-75.
  15. Itzhak Gilboa & David Schmeidler, 1989. "Maxmin Expected Utility with Non-Unique Prior," Post-Print hal-00753237, HAL.
  16. David Schmeidler, 1989. "Subjective Probability and Expected Utility without Additivity," Levine's Working Paper Archive 7662, David K. Levine.
  17. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
  18. G. L. S. Shackle, 1949. "A Non-Additive Measure of Uncertainty," Review of Economic Studies, Oxford University Press, vol. 17(1), pages 70-74.
  19. Lawson, Tony, 1985. "Uncertainty and Economic Analysis," Economic Journal, Royal Economic Society, vol. 95(380), pages 909-27, December.
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