A context for financial mathematics: ethics in the face of uncertainty

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Abstract

This paper identifies the mathematical Fundamental Theorem of Asset Pricing with the ethical statement that equality is a sufficient and necessary criterion for justice. The consequence of this identification is that it highlights the importance of ethics and social cohesion when society faces uncertainty, rather than scarcity, and it challenges the assumption that economic decisions should be based exclusively on utility maximisation.
Original languageEnglish
JournalReview of Social Economy
Publication statusUnpublished - 2012

Keywords

  • Arbitrage, asset pricing, probability, ethics, ultimatum game

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