Fontini F. (2009)

Probability And Uncertainty: The Legacy Of Georgescu‐Roegen. Metroeconomica60(2), 324-342.

 

Abstract:

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.