Foundations of Rational Choice Under Risk - Softcover

Anand, Paul

Softcover

ISBN 10: 0198774427 ISBN 13: 9780198774426

Publisher: OUP Oxford, 1995

Synopsis

In this book, Paul Anand examines the normative interpretation of Subjective Expected Utility (SEU). He tests the philosophical and logical basis for associating SEU with rational choice. Decision theorists have increasingly come to accept the experimental evidence that subjects systematically violate the axiomatic assumptions of SEU, and as a result the past decade has witnessed an explosion of mathematical models that seek to capture this behaviour. A current issue is whether axioms of SEU really are canons of rationality. Anand discusses whether the new decision-theoretic models are more than just accounts of irrational behaviour.

The main themes of the book are that, empirically, SEU is false, and that normatively it imposes unnecessary constraints on rational agency. Problems with Bayesianism are introduced and it is shown that useful distinctions between risk and uncertainty (in a Keynesian sense) can be made. Some of the radical methodological changes in economics that underpin theoretical developments in decision theory and economics are also discussed.

About this title

About the Author

Paul Anand was a Research Fellow of Templeton College Oxford when the book was written and currently has affiliations to the Open University, Oxford and LSE.

Edition details

• Publisher: OUP Oxford
• Publication date: 1995
• Language: English
• ISBN 10: 0198774427
• ISBN 13: 9780198774426
• Binding: Paperback
• Number of pages: 176