The Writing and Reception of Risk, Uncertainty and Profit

Cambridge Journal of Economics Special Issue on Frank Knight's Risk, Uncertainty and Profit & J. M. Keynes' Treatise on Probability

26 Pages Posted: 1 Jun 2020 Last revised: 2 Oct 2020

See all articles by Ross B. Emmett

Ross B. Emmett

Arizona State University (ASU) - Center for the Study of Economic Liberty; PERC - Property and Environment Research Center

Date Written: August 17, 2020

Abstract

Risk, Uncertainty and Profit was published in 1921, but started as the doctoral thesis “A Theory of Business Profit,” defended in 1916. The first half of the paper examines the changes in organization and argument that Knight undertook between completing the thesis defense and the book’s publication five years later. The reorganization helped Knight focus attention on uncertainty as the most important aspect of economic life standing between the worlds of perfect and imperfect competition, and to explore more of its implications for both price theory and entrepreneurial judgment.

The second half of the paper carries the story forward by examining the reception Risk, Uncertainty and Profit received from 1921 until Knight’s retirement in the early 1950s. The study of its reception uses a database of citations of Knight’s book in economics journals found through a JSTOR search. While Knight’s book is remembered today mostly for its introduction of uncertainty, in the economics literature the book’s treatment of basic price theory is more frequently cited, especially in the leading economics journals of the interwar period. The citation data indicates that the role of Risk, Uncertainty and Profit in economics education at the London School of Economics and the University of Chicago extended and expanded the book’s impact.

Keywords: Frank Knight, Uncertainty, Price Theory

JEL Classification: B1, B3, D8

Suggested Citation

Emmett, Ross B., The Writing and Reception of Risk, Uncertainty and Profit (August 17, 2020). Cambridge Journal of Economics Special Issue on Frank Knight's Risk, Uncertainty and Profit & J. M. Keynes' Treatise on Probability, Available at SSRN: https://ssrn.com/abstract=3591596 or http://dx.doi.org/10.2139/ssrn.3591596

Ross B. Emmett (Contact Author)

Arizona State University (ASU) - Center for the Study of Economic Liberty ( email )

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