Probabilistic Risk, Neuroeconomic Ambiguity, and Keynesian Uncertainty

Abstract

The relative importance of agent confidence and rational expectations has fluctuated in the course of economic thought, and remains an important issue in the discipline today. Positions on the formations of expectations and types of considerations made by agents when facing economic decisions are relevant to economists’ assumptions, models, and policy suggestions. Economists appear unaware of current work in neuroeconomics that addresses these exact concerns. It is the aim of this thesis to consider the historical construction of such ideas in economics from a neuroeconomics perspective, to thus locate an old controversy in a new intellectual framework.