Savage’s response to Allais as Broomean reasoning

Journal article: 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.

Author(s)

Franz Dietrich, Antonios Staras, Robert Sugden

Journal
  • Journal of Economic Methodology
Date of publication
  • 2021
Keywords JEL
B41 C18 D01 D81 D90
Keywords
  • Savage
  • Allais Paradox
  • Broome
  • Reasoning
  • Behavioural economics
Pages
  • 143-164
Version
  • 1
Volume
  • 28