Economics and Philosophy

Table of Contents - 2009 - Volume 25, Special Issue 03 (Economics and Philosophy on Ambiguity Aversion)  

Essay

REJOINDER: THE “AMBIGUITY AVERSION LITERATURE: A CRITICAL ASSESSMENT”

Nabil I. Al-Najjara1 and Jonathan Weinsteina1

a1 Northwestern University

The pioneering contributions of Bewley, Gilboa and Schmeidler highlighted important weaknesses in the foundations of economics and game theory. The Bayesian methodology on which these fields are based does not answer such basic questions as what makes beliefs reasonable, or how agents should form beliefs and expectations. Providing the initial impetus for debating these issues is a contribution that will have the lasting value it deserves.

Nabil I. Al-Najjar is a Professor of Managerial Economics and Decision Sciences, Kellogg School of Management, Northwestern University. His current research focuses on learning and decision theory. Email: al-najjar@northwestern.edu. Research page: http://www.kellogg.northwestern.edu/faculty/alnajjar/htm/index.htm

Jonathan Weinstein is an Associate Professor of Managerial Economics and Decision Sciences, Kellogg School of Management, Northwestern University. His current research focuses on higher-order uncertainty and decision theory. Email: j-weinstein@kellogg.northwestern.edu. Research page: http://www.kellogg.northwestern.edu/faculty/weinstein/htm/index.htm

Footnotes

We would like to express our gratitude to the Editor Giacomo Bonanno for organizing this special issue and giving us the opportunity to be part of the debate about so central a topic in modern economic theory. We also thank the authors of the replies for their thoughtful observations and criticisms, and Rakesh Vohra for organizing the workshop Decision Theory and its Discontents at Northwestern University, 30 April–1 May, 2009, where our paper and some of the replies were presented. In addition to the authors of the replies, we also benefited from critiques of our work in the presentations by Faruk Gul, David Schmeidler, Luca Rigotti, and Peter Klibanoff.

We thank Luciano de Castro, Mallesh Pai, and Costis Skiadas for many helpful conversations, and Simone Galperti for his research assistance.