Schumpeter Lecture

EEA
Presenter(s) Type Length Chair Room Number Add to calendar
Itzhak Gilboa Keynote Address 31/08 11:00 CEST
75
mins
Andreu Mas-Collel
Auditori
Add to Calendar 2023-08-31 11:00:00 2024-02-21 18:30:41 EEA-ESEM 2023: Schumpeter Lecture. Room: Auditori How should we reason about uncertainty in the absence of objective probabilities?  The common approach in economic theory is that the rational way to deal with such situations is Bayesian: using subjective probabilities when objective ones are not given and cannot be estimated.  We take issue with this view.  We adopt a pragmatic definition of rationality, which is based on the decision maker's willingness to change her supposedly-irrational behavior.  With this definition in mind, we argue that it is sometimes more rational to admit that we do not know a distribution than to pretend we do.  The attempt to convince decision makers to adopt certain modes of behavior calls for an axiomatic approach.  In one paper we ask, what is a rational way to select a set of distributions, where a single one may be hard to pick?  In another we study continuity with near zero probability, asking what is the exact behavioral meaning of "zero risk" policies. How should we reason about uncertainty in the absence of objective probabilities?  The common approach in economic theory is that the rational way to deal with such situations is Bayesian: using subjective probabilities when objective ones are not given and cannot be estimated.  We take issue with this view.  We adopt a pragmatic definition of rationality, which is based on the decision maker's willingness to change her supposedly-irrational behavior.  With this definition in mind, we argue that it is sometimes more rational to admit that we do not know a distribution than to pretend we do.  The attempt to convince decision makers to adopt certain modes of behavior calls for an axiomatic approach.  In one paper we ask, what is a rational way to select a set of distributions, where a single one may be hard to pick?  In another we study continuity with near zero probability, asking what is the exact behavioral meaning of "zero risk" policies. EEA-ESEM 2023 congress@eeassoc.org Europe/Rome public

How should we reason about uncertainty in the absence of objective probabilities?  The common approach in economic theory is that the rational way to deal with such situations is Bayesian: using subjective probabilities when objective ones are not given and cannot be estimated.  We take issue with this view.  We adopt a pragmatic definition of rationality, which is based on the decision maker's willingness to change her supposedly-irrational behavior.  With this definition in mind, we argue that it is sometimes more rational to admit that we do not know a distribution than to pretend we do.  The attempt to convince decision makers to adopt certain modes of behavior calls for an axiomatic approach.  In one paper we ask, what is a rational way to select a set of distributions, where a single one may be hard to pick?  In another we study continuity with near zero probability, asking what is the exact behavioral meaning of "zero risk" policies.

Papers

(Listed in order of presenters above)

Reasoning in the Face of Uncertainty

Presentations

Reasoning in the Face of Uncertainty