----------------- HES POSTING ----------------- Dear colleagues, We should remind ourselves that neoclassical economics does not always require the assumption of perfect knowledge. Although the neoclassical theory of, for example, perfect competition reproduced in textbooks does require perfect knowledge (of the relevant variables), neoclassical economics has for quite some time now assumed in many other contexts probabilistic knowledge and, as someone said on this list a couple of days ago, asymmetric information (to a lesser extent, as some neoclassicals stick to the representative agent). Even a notion of uncertainty (sometimes called Knightian uncertainty, sometimes called ambiguity) that goes beyond Knightian risk or uncertainty in standard Subjective Expected Utility theory is beginning to make its way into the mainstream. In reply to Michael Perelman, I'd say that formalization does not require perfect knowledge either, at least as I understand these terms, which is not necessarily the same way Michael does. On the other hand, it is true that some specific varieties of formalization, particularly some axiomatic approaches to behavior in neoclassical economics, impose quite restrictive assumptions regarding knowledge - but not perfect knowledge. Of course, all this depends on what one means by perfect knowledge. In the sense I use the expression, perfect knowledge is distinct from probabilistic knowledge and from uncertain knowledge of probabilities (the latter is characteristic of what some people have called termed Knightian uncertainty, ambiguity or just uncertainty). These other types of knowledge have been suitable to an axiomatic approach. Cheers, David Dequech ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]