Abraham Wald's complete class theorem and Knightian uncertainty

Christoph Kuzmics

Games and Economic Behavior, 2017, vol. 104, issue C, 666-673

Abstract: I study the implications of Wald's (1947) complete class theorem for decision making under Knightian uncertainty (or ambiguity). Suppose we call someone who uses Wald's approach to statistical decision making a Waldian. A Waldian may then have preferences over acts that are not in agreement with subjective expected utility but always chooses as if she was a subjective expected utility maximizer. In particular, even Wald's (1945) minmax decision rule is consistent with subjective expected utility.

Keywords: Ambiguity; Decision theory; Knightian uncertainty; Experimental design (search for similar items in EconPapers)
JEL-codes: C72 C81 C90 D01 D03 D81 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:104:y:2017:i:c:p:666-673

DOI: 10.1016/j.geb.2017.06.012

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