Knightian Uncertainty Meets Ranking Theory

Abstract

Knightian uncertainty is not a special kind of uncertainty; it’s just uncertainty. And it raises the issue how we may model uncertainty. The paper gives a brief overview over non-probabilistic measures of uncertainty, starting with Shackle’s functions of potential surprise and mentioning non-additive probabilities, Dempster–Shafer belief functions, etc. It arrives at an explanation of ranking theory as a further uncertainty model and emphasizes its additional epistemological virtues, which consist in a representation of belief, i.e., of taking something to be true (which is the basic notion of traditional epistemology and admits of degrees as well) and a full dynamic account of those degrees. The final section addresses the issue how these uncertainty measures and in particular ranking theory may be used within a decision theoretic context.