‘Uncertainty is an intimate dimension of our daily lives. For some, it is the zest of life. Without uncertainty, the distinction between the present and the future is blurred; there are no surprises and no anticipations, hence no thrills; there is no scope for achievement, hence no rewards; and love, which always entails risks as well as the joy of discovery, loses its sharp edge. Yet, for others, uncertainty is the curse of life. It is so for those who feel threatened with loss of life or individual freedom, who have no assured shelter or subsistence, who lack job security and fear unemployment.

‘Uncertainty is thus an intimate dimension of economics as well. Decisions of households, firms or policy makers seldom entail fully deterministic consequences; uncertainty is “generic”. (Still, many titles in economics include the precision “under uncertainty”, not even parenthetical; whereas it should be natural to include the warning “under certainty”, when appropriate.)’

The present book collects twenty papers on economic decisions by households, firms or policy makers. (The title sacrifices to tradition by including the qualification ‘under uncertainty’, not even parenthetical.…) These papers were written over the past 25 years and span my professional career. Yet, there is a common thread running through most of them.