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The Empire of ValueA New Foundation for Economics$
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André Orléan

Print publication date: 2014

Print ISBN-13: 9780262026970

Published to MIT Press Scholarship Online: January 2015

DOI: 10.7551/mitpress/9780262026970.001.0001

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Conclusion

Conclusion

Chapter:
(p.311) Conclusion
Source:
The Empire of Value
Author(s):

André Orléan

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262026970.003.0011

The orthodox belief that economic systems fundamentally differ from other social systems by virtue of the self-regulating properties of competition and the countervailing forces it automatically unleashes in moments of crisis has been shown to be false on both theoretical and empirical grounds. Perhaps no single episode is more revelatory of the discomfort economists feel in the presence of inconvenient facts than the 1952 encounter between Savage and Allais, where Savage was led to reject his own choice criterion for decision-making under uncertainty. Yet no attempt has been made since to come to terms with the implications of Allais's paradox: still today the maximization of expected utility remains the basic economic model for describing rational behavior in the face of risk. Nothing will change unless economists look beyond instrumental rationality and think of value not as an inherent property of objects, but as a social institution.

Keywords:   Allais's paradox, choice criterion, decision-making under uncertainty, instrumental rationality, social institution, value

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