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PROBABILITY AND UNCERTAINTY: THE LEGACY OF GEORGESCU‐ROEGEN
Author(s) -
Fontini Fulvio
Publication year - 2009
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2008.00337.x
Subject(s) - lexicographical order , mathematical economics , probabilistic logic , subjective expected utility , economics , function (biology) , mathematics , econometrics , expected utility hypothesis , combinatorics , statistics , biology , evolutionary biology
In this paper we consider Georgescu‐Roegen's approach to uncertainty, showing that his characterization of expectations cannot be reduced to any probabilistic decision‐making model. Drawing upon Georgescu‐Roegen's lesson a lexicographical utility function is proposed and analysed in the mark of his own peculiar scientific methodology. It is demonstrated that such a formulation can be useful in solving the usual failure of the expected utility model, such as the Ellsberg paradoxes. The epistemic limits of our re‐construction are considered.