Predictions and Hopes Global political economy dynamics of the next ten years

Hardy Hanappi

MPRA Paper from University Library of Munich, Germany

Abstract: Predictions and hopes are different things. Predictions are based on past empirical observations. They single out what seem to be essential variables and the relationships between them and assume that their importance will prevail in the future. Hopes add a component to a prediction, namely an evaluation, which refers back to the entity that produces the prediction. The path-breaking book of Neumann and Morgenstern started with a concise, axiomatic formalisation of utility theory, id est the microeconomic conceptualisation of hopes, and in the following chapters steps into the jungle of strategic decision-making, id est making predictions about sets of strategic outcomes, commonly known as game theory . This paper inverts this sequence: first predictions, then hopes. The reason is simple. The idea that hopes can be encapsulated in a rigid setup of a preference order of an individual human decision-maker is misleading. Hopes are dynamic, hopes are emerging; and not at all inborn properties of human individuals. Most of them grow out of a rich and informed communication sphere. And in this information sphere, which so far has not been reduced to a unified axiomatic formal model of the ‘information sphere of the human species’, the emergence of preliminary predictions made by social entities is the first step towards hopes. This is why preliminary predictions are described before the emerging hopes are taken into the picture. Both, predictions and hopes, remain in a preliminary and unprecise state – contrary to the aspirations of game theory. But note that this approach allows much better for a flexible response to changing theoretical needs than to rely on so-called ‘heroic’ assumptions. In reconnecting hopes and predictions an additional advantage is that a mixture of pessimism and optimism can be achieved, which is a necessary ingredient for the stimulation of progress.

Keywords: Political Economy; Globalisation (search for similar items in EconPapers)
JEL-codes: B50 F01 P00 (search for similar items in EconPapers)
Date: 2024-05-21
New Economics Papers: this item is included in nep-hme and nep-upt
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