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Journal: The Way of Science (Vol.1, No. 40)

Publication Date:

Authors : ;

Page : 48-50

Keywords : risk; uncertainty; business profit; probability; perfect competition; imperfect competition; business environment; expenses; income; market economy; assessment.;

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. In the article the views of uncertainty and risk by the representatives of classical political economy (R. Cantillon, J.S. Mill, H. von Mangoldt, J.-B. Say); of Keynesian economics (J.M. Keynes); of neoclassical synthesis school (P.A. Samuelson); of the Chicago school of economics (F.H. Knight) are considered. The author's translation of quotations from essay by the founder of entrepreneur concept R. Cantillon is given. Unlike the other authors, in this research evolution of uncertainty concept from the category integrated with risk into a certain notion, closely related to profit, can be traced. The main attention is given to F.H. Knight's theory, who separated the notions of risk and uncertainty and described the differences in detail. Risk is understood as an element of uncertainty, which can be measured by probabilistic characteristics, and the unmeasurable part is allocated as a separated category. The influence of this category on profit and loss is studied. The various economic models are considered as well as the influence of uncertainty on profit under the certain conditions. The causes of uncertainty are described, the methods to reduce its amount are distinguished.

Last modified: 2017-07-04 21:47:35