After the Crisis: Financial Economics and Decision Theory
University of Siena - Department of Economic Policy, Finance and Development; University of Siena - Department of Economics
March, 26 2012
HISTORY OF ECONOMIC THOUGHT AND POLICY, Forthcoming
This paper reviews the classics of financial economics with the benefit of insight offered by the recent financial crisis. The failure of mainstream financial models to explain the observed behavior of markets is put in relation with Itzhak Gilboa’s critique of the decisional model used for assessing choice under uncertainty. The paper argues that Gilboa’s attempt to develop an alternative theory of decision under uncertainty has a clear Keynesian derivation.
Number of Pages in PDF File: 18
Keywords: financial markets, decision theory, uncertainty
JEL Classification: B26, D81, G11Accepted Paper Series
Date posted: March 28, 2012
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