Frank Knight's (1921) famous distinction between risk and uncertainty has entered the jargon of economics and decision theory. Yet it appears to have gone unnoticed that his formulation suffers from an elementary confusion. This note locates the source of the problem and proposes a reformulation...

The welfare state is often portrayed as provider of insurance against ‘uncertainties’, in Knight's (1921) sense of the term, which would be refused or underinsured on private markets. This image conflicts with the standard economic model of risk exchange founded on the subjective...

In the insurance literature it is often argued that private markets can provide insurance against ‘risk’ but not against ‘uncertainties’ in the sense of Knight (1921) or Keynes (1921). This claim is at odds with the standard economic model of risk exchange which, in assuming that...

The Elgar Companion to Economics and Philosophy aims to demonstrate exactly how these two important areas have always been linked, and to illustrate the key areas of overlap. The contributors are well-known and distinguished authors from a variety of disciplines, who have been invited both to...

The Elgar Companion to Economics and Philosophy aims to demonstrate exactly how these two important areas have always been linked, and to illustrate the key areas of overlap. The contributors are well-known and distinguished authors from a variety of disciplines, who have been invited both to...

Bayesian decision theory and inference have left a deep and indelible mark on the literature on management decision-making. There is however an important issue that the machinery of classical Bayesianism is ill equipped to deal with, that of “unknown unknowns” or, in the cases in which they...