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Expected Value Under Normative Uncertainty

Franz Dietrich and Brian Jabarian ()
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Brian Jabarian: Université Paris 1 Paris School of Economics & Princeton University, https://cv.archives-ouvertes.fr/brian-jabarian

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: Maximising expected value is the classic doctrine in choice theory under empirical uncertainty, and a prominent proposal in the emerging philosophical literature on normative uncertainty, i.e., uncertainty about the standard of evaluation. But how should Expectationalism be stated in general, when we can face both uncertainties simultaneously, as in common in life? Surprisingly, different possibilities arise, ranging from Ex-Ante to Ex-Post Expectationalism, with several hybrid versions. The difference lies in the perspective from which expectations are taken, or equivalently the amount of uncertainty packed into the prospect evaluated. Expectationalism thus faces the classic dilemma between ex-ante and ex-post approaches, familiar elsewhere in ethics and aggregation theory under uncertainty. We analyse the spectrum of expectational theories, showing that they reach diverging evaluations, use different modes of reasoning, take different attitudes to normative risk as well as empirical risk, but converge under an interesting (necessary and sufficient) condition

Keywords: normative versus empirical uncertainty; expected value theory; expectationalism; ex-ante versus ex-post approach (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2020-09
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Working Paper: Expected Value Under Normative Uncertainty (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:20015

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