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A Rehabilitation of the Principle of Insufficient Reason
The Quarterly Journal of Economics
Vol. 94, No. 3 (May, 1980), pp. 493-506
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/1884581
Page Count: 14
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It is shown that two of the axioms necessary for the expected utility rule imply the Principle of Insufficient Reason. Whenever a decision maker knows the possible states of the world, but completely lacks information about the plausibility of each single state, he has to behave as if all states occurred with the same objective probability, known with certainty. The result is applied to decision trees and used to solve a problem formulated by Savage in order to discredit the classical version of the Principle of Insufficient Reason.
The Quarterly Journal of Economics © 1980 Oxford University Press