Advertisement

Erkenntnis

, Volume 79, Issue 6, pp 1225–1248 | Cite as

Types of Uncertainty

  • Richard Bradley
  • Mareile Drechsler
Article

Abstract

We distinguish three qualitatively different types of uncertainty—ethical, option and state space uncertainty—that are distinct from state uncertainty, the empirical uncertainty that is typically measured by a probability function on states of the world. Ethical uncertainty arises if the agent cannot assign precise utilities to consequences. Option uncertainty arises when the agent does not know what precise consequence an act has at every state. Finally, state space uncertainty exists when the agent is unsure how to construct an exhaustive state space. These types of uncertainty are characterised along three dimensions—nature, object and severity—and the relationship between them is examined. We conclude that these different forms of uncertainty cannot be reduced to empirical uncertainty about the state of the world without inducing an increase in its severity.

Keywords

Factual Uncertainty Normative Uncertainty Causal Decision Theorist Evidential Decision Theory Default View 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgements

We would like to acknowledge the support of the Arts and Humanities Research Council (Grant Reference: AH/I003118/1), The Netherlands Organisation for Scientific Research (Grant Number 236-20-005), and the Fonds National de la Recherche Luxembourg (Grant Number 09-194). We are grateful to Hykel Hosni and Casey Helgeson for their comments on an earlier draft.

References

  1. Al-Najjar, N. I., & Weinstein, J. (2009). The ambiguity aversion literature: A critical assessment. Economics and Philosophy, 25, 249–284.CrossRefGoogle Scholar
  2. Anscombe, F. J., & Aumann, R. J. (1963). A definition of subjective probability. The Annals of Mathematical Statistics, 34(1), 199–205.CrossRefGoogle Scholar
  3. Bewley, T. F. (1986/2002). Knightian decision theory. Part I. Decisions in Economics and Finance, 25, 79–110.Google Scholar
  4. Binmore, K. (2009). Rational decisions. Princeton, NJ: Princeton University Press.Google Scholar
  5. Bradley, R. (2009). Revising incomplete attitudes. Synthese, 171(2), 235–256.CrossRefGoogle Scholar
  6. Broome, J. (1991). Desire, belief and expectation. Mind, 100(2), 265–267.CrossRefGoogle Scholar
  7. Dekel, E., Lipman, B. L., & Rustichini, A. (2001). Representing preferences with a unique subjective state space. Econometrica, 69(4), 891–934.CrossRefGoogle Scholar
  8. Ellsberg, D. (1961). Risk, ambiguity, and the Savage axioms. Quarterly Journal of Economics, 75(4), 643–669.CrossRefGoogle Scholar
  9. Epstein, L. G., & Seo, K. (2009). Subjective states: A more robust model. Games and Economic Behavior, 67(2), 408–427.CrossRefGoogle Scholar
  10. Fox, C. R., & Tversky, A. (1995). Ambiguity aversion and comparative ignorance. The Quarterly Journal of Economics, 110(3), 585–603.CrossRefGoogle Scholar
  11. Ghirardato, P. (2001). Coping with ignorance: Unforeseen contingencies and non-additive uncertainty. Economic Theory, 17, 247–276.CrossRefGoogle Scholar
  12. Gilboa, I., & Schmeidler, D. (1989). Maxmin expected utility with non-unique prior. Journal of Mathematical Economics, 18, 141–153.CrossRefGoogle Scholar
  13. Gilboa, I., & Schmeidler, D. (1995). Case-based decision theory. The Quarterly Journal of Economics, 110(3), 605–639.CrossRefGoogle Scholar
  14. Gilboa, I., & Marinacci, M. (2011). Ambiguity and the Bayesian paradigm. Mimeo.Google Scholar
  15. Hansson, S.-O. (1994). Decision making under great uncertainty. Philosophy of the Social Sciences, 26(3), 369–386.CrossRefGoogle Scholar
  16. Hansson, S.-O. (2013). Decision theory. A brief introduction. http://home.abe.kth.se/soh/decisiontheory.pdf.
  17. Jeffrey, R. C. (1965). The logic of decision. New York: McGraw Hill.Google Scholar
  18. Joyce, J. (1999). Foundations of causal decision theory. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  19. Joyce, J. (2010). A defense of imprecise credences in inference and decision making. Philosophical Perspectives, 24(1), 281–323.CrossRefGoogle Scholar
  20. Karni, E. (2013). Subjective expected utility with incomplete preferences. Econometrica, 81(1), 255–284.CrossRefGoogle Scholar
  21. Keynes, J. M. (1937). The general theory of employment. The Quarterly Journal of Economics, 51(2), 2009–2023.CrossRefGoogle Scholar
  22. Knight, F. H. (1921). Risk, uncertainty and profit. Boston, MA: Hart, Schaffner and Marx.Google Scholar
  23. Kreps, D. M. (1992). Static choice in the presence of unforeseen contingencies. In P. Dasgupta, D. Gale, O. Hart, E. S. Maskin (Eds.), Economic analysis of markets and games (pp. 258–281). Cambridge, MA: MIT Press.Google Scholar
  24. Levi, I. (1974). On indeterminate probabilities. The Journal of Philosophy, 71(13), 391–418.CrossRefGoogle Scholar
  25. Levi, I. (1985). Imprecision and indeterminacy in probability judgment. Philosophy of Science, 25(3), 390–409.CrossRefGoogle Scholar
  26. Levi, I. (1986). Hard choices: Decision making under unresolved conflict. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  27. Lewis, D. (1981). Causal decision theory. Australasian Journal of Philosophy, 59, 5–30.CrossRefGoogle Scholar
  28. Lewis, D. (1988). Desire as belief. Mind, 97, 323–332.CrossRefGoogle Scholar
  29. Luce, R. D., & Raiffa, H. (1957/1989). Games and decisions. Introduction and critical survey. New York: Dover Publications.Google Scholar
  30. Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995). Micoreconomic theory. New York: Oxford Press.Google Scholar
  31. Oddie, G. (1994). Harmony, purity, truth. Mind, 103(412), 451–472.CrossRefGoogle Scholar
  32. Popper, K. (1959). The logic of scientific discovery. London: Hutchinson.Google Scholar
  33. Savage, L. J. (1954). The foundations of statistics. New York: Wiley.Google Scholar
  34. Schervish, M. J., Seidenfeld, T., & Kadane, J. B. (1995). A representation of partially ordered preferences. The Annals of Statistics, 23(6), 2168–2217.CrossRefGoogle Scholar
  35. Schmeidler, D. (1989). Subjective probability and expected utility without additivity. Econometrica, 57(3), 571–587.CrossRefGoogle Scholar
  36. Slovic, P., & Tversky, A. (1974). Who accepts Savage’s axioms?. Behavioral Science, 14, 368–373.CrossRefGoogle Scholar
  37. Stalnaker, R. (1981). Letter to David Lewis. In W. Harper, Stalnaker & G. Pearce & (Eds.), IFS: Conditionals, belief, decision, chance, and time. Dordrecht, NL: Reidel.Google Scholar
  38. Walker, O., & Dietz, S. (2011). A representation result for choice under conscious unawareness. Working Paper, Grantham Research Institute, London, UK.Google Scholar
  39. Walley, P. (1991). Statistical reasoning with imprecise probabilities. London: Chapman and Hall.CrossRefGoogle Scholar
  40. Weintraub, R. (2007). Desire as belief, Lewis notwithstanding. Logic and Analysis, 67(294), 116–122.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Department of Philosophy, Logic and Scientific MethodLondon School of Economics and Political ScienceLondonUK

Personalised recommendations