Savage’s response to Allais as Broomean reasoning

Franz Dietrich, Antonios Staras, Robert Sugden

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Abstract

Savage famously contravened his own theory when first confronting the Allais Paradox, but then convinced himself that he had made an error. We examine the formal structure of Savage’s ‘error-correcting’ reasoning in the light of (i) behavioural economists’ claims to identify the latent preferences of individuals who violate conventional rationality requirements and (ii) Broome’s critique of arguments which presuppose that rationality requirements can be achieved through reasoning. We argue that Savage’s reasoning is not vulnerable to Broome’s critique, but does not provide support for the view that behavioural scientists can identify and counteract errors in people’s choices or preferences.
Original languageEnglish
Pages (from-to)143-164
Number of pages22
JournalJournal of Economic Methodology
Volume28
Issue number2
Early online date24 Dec 2020
DOIs
Publication statusPublished - 2021

Keywords

  • Savage
  • Allais Paradox
  • Broome
  • rationality
  • reasoning
  • behavioural economics

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