Decisions under Uncertainty

At the beginning of his academic career Sinn primarily focused on the economic theory of risk. His doctoral thesis submitted in 1977 and published by Mohr Siebeck in 1980 as Ökonomische Entscheidungen bei Ungewissheit (Sinn 1980a) was also published in English as Economic Decisions under Uncertainty (Sinn 1983a) by North Holland 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. According to Martin Hellwig (2008), Sinn anticipated a central aspect of the Stiglitz and Weiss article published in 1981, which is the standard reference work.

Refereed scientific monographs

Economic Decisions under Uncertainty, North Holland: Amsterdam, New York und Oxford 1983, 359 pages. (Translation of Ökonomische Entscheidungen bei Ungewißheit). Second English edition: Physica: Heidelberg 1989. To Amazon.




Articles in refereed journals

"Psychophysical Laws in Risk Theory“, Journal of Economic Psychology 6, 1985, pp. 185-206. (Download, 1.4 MB).

"Kinked Utility and the Demand for Human Wealth and Liability Insurance“, European Economic Review 17, 1982, pp. 149-162; (Download, 750 KB).

"A Rehabilitation of the Principle of Insufficient Reason“, Quarterly Journal of Economics 94, 1980, pp. 493-506; (Download, 326 KB).