Probabilistic uncertainty refers to situations where learning can proceed by repeatedly trying actions. Beliefs converge to a common standard (“objective probabilities”) regardless of how sophisticated belief updating takes place. This is also the environment where machine learning is successful. Probabilistic uncertainty is the foundation of much of empirical work on decision-making under uncertainty. Economists study all decision-making under uncertainty as if this is the only type of uncertainty that exists.
Leverhulme International Professorship in Neuroeconomics at the University of Cambridge Faculty of Economics
