Uncertainty in a Strong Sense: Meaning and Sources

Abstract

This paper advocates a strong, or radical, notion of uncertainty, in which knowledge due to the paucity of evidence is incomplete to an extent that makes it not completely reliable as a guide to conduct. The paper begins by examining how this notion is expressed by Keynes's epistemic approach in his A Treatise on Probability and by Davidson's emphasis on nonergodicity. Discussing the relation between epistemology and ontology, I identify some compatibility between these two approaches. Next, I discuss the Expected Utility model and some attempts to generalize it. These attempts go beyond standard EU theory but fail to face the issues of creativity and structural change. I then turn to the issue of the possible gradability of uncertainty in a strong sense. In the final part, before the conclusion, creativity and structural change are highlighted as the most relevant sources of strong uncertainty for economic analyses.