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The Economics of Uncertainty

From the collection #INET2017

This episode features Sheila Dow speaking about the economics of uncertainty. Studies in psychology, neuroscience, biology, and many of the social sciences have long illustrated that human beings react very different from what economics textbooks tell you to expect when they are operating under conditions of radical uncertainty.

As Dow notes in this interview, individuals cannot know exactly how ignorant they are, as the future is yet to be created. No standard of complete knowledge or complete ignorance exists to provide a reference against which to measure our actual ignorance.

What implication does that have for the study and practice of economics?

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