UNCERTAINTY AND DECISION-MAKING: TOWARD A TRACTABLE FRAMEWORK a By: David Howden b,c JEL Codes: B25, D83, D84, D9 Keywords: Austrian, decision-making under risk and uncertainty, expectations, intertemporal choice Abstract: Conditions of uncertainty have increasingly been perverted to describe quantifiable risk. Shackle (1952a) provides a basic framework that allows uncertainty to be factored for in cases of decision-making. Expanding upon this, we can see that the addition of a subjective probability distribution along the set of outcomes deemed possible by the agent gives rise to multiple focus- outcomes. These are the real attainable values which arrest the attention of the agent the most (both positive and negative) and hence, are the crucial factors determining choice under uncertainty. By developing this model, we find that qualitative factors concerning information, and elastic expectations can be examined more clearly than under prevailing risk-based models. The foundation of a tractable framework is devised which allows for new insights into choice and decision-making under cases of true Knightian uncertainty. a Submission: 2008 Don Lavoie Memorial Graduate Student Essay Competition. b Ph.D. Candidate: Universidad Rey Juan Carlos, Madrid, Spain. c Contact: davehowden@hotmail.com [1]