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 values. But how should Expectationalism be stated in general, when we can face both uncertainties simultaneously, as is common in life? Surprisingly, different possibilities arise, ranging from Ex-Ante to Ex-Post Expectationalism, with several hybrid versions. Expectationalism thus faces the classic dilemma between ex-ante and ex-post approaches. Different expectational theories reach diverging evaluations, use different modes of reasoning, and take different attitudes to risk; but they converge undre an interesting (necessary and sufficient) condition. We relate choice under normative uncertainty to choice by Harsany's impartial observer' and Rawls's person behind the 'veil of ignorance', who are uncertain about their own identity and values; and we relate Expectationalism under normative uncertainty to Harsanyi's linear approach to aggregating values of different individuals or identities

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, Revised 2021-03
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Working Paper: Expected Value Under Normative Uncertainty (2020)
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