Ellsberg Rules and Keynes’s State of Long-Term Expectation: More Than an Accordance
This 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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Department of Economics University of Siena
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