Work

Decision under normative uncertainty

Year: 2021

Type: article

Abstract: While ordinary decision theory focuses on empirical uncertainty, real decision-makers also face normative uncertainty: uncertainty about value itself. From a purely formal perspective, normative uncertainty is comparable to (Harsanyian or Rawlsian) identity uncertainty in the ‘original position’, where one’s future values are unknown. A comprehensive decision theory must address twofold uncertainty – normative and empirical. We present a simple model of twofold uncertainty, and show that the most popular decision principle – maximizing expected value (‘Expectationalism’) – has different formulations, namelyEx-AnteExpectationalism,Ex-PostExpectationalism, and hybrid theories. These alternative theories recommend different decisions, reasoning modes, and attitudes to risk. But they converge under an interesting (necessary and sufficient) condition.

Source: Economics and Philosophy

DOI: 10.1017/s0266267121000201

Authors: Franz Dietrich, Brian Jabarian

Institutions: Centre National de la Recherche Scientifique, Centre d'Économie de la Sorbonne, Paris School of Economics, Université Paris 1 Panthéon-Sorbonne

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

Funder: Agence Nationale de la Recherche

Awards: Coping with Heterogeneous Opinions, Collective Attitude Formation, Ecole d'Economie de Paris