Ellsberg Rules and Keynes’s State of Long-Term Expectation: More Than an Accordance

Marcello Basili

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: This paper advances an intuitive way to represent Keynes’s notion of long-term expectation. The epsilon-contamination approach is introduced and a rational and coherent decision rule is derived. The result is evidence that Ellsberg and Keynes share the notion of uncertainty and adopt the same class of decision rules.

Keywords: Keynes; Ellsberg; expectation; consensus distribution; uncertainty; epsilon-contamination. (search for similar items in EconPapers)
JEL-codes: B16 D81 (search for similar items in EconPapers)
Date: 2013-09
New Economics Papers: this item is included in nep-pke and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:685

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