Economic Decisions under Uncertainty

Hans-Werner Sinn

North Holland: Amsterdam, New York and Oxford 1983, 359 pages. (Translation of Ökonomische Entscheidungen bei Ungewißheit). Second English edition: Physica: Heidelberg 1989. ISBN 978-3790804362.

Economic Decisions under Uncertainty is the English translation of Hans-Werner Sinns doctoral thesis Ökonomische Entscheidungen bei Ungewissheit (submitted in 1977, published in 1983). The main focus of this work lies on the symbiosis of expected utility theory and the axiomatic basis of the mean-variance analysis, the Principle of Insufficient Reason, the psychological foundation of risk preferences, and above all, the explanation of an excessive inclination to take risks thanks to limited liability and wealth at the expense of third parties. This theory later became a central element of the explanation for the behaviour of zombie banks.