RARE FIRST EDITION ON KNIGHTIAN UNCERTAINTY. KNIGHT, FRANK H. 1885-1972. Risk, Uncertainty and P...

RARE FIRST EDITION ON KNIGHTIAN UNCERTAINTY. KNIGHT, FRANK H. 1885-1972. Risk, Uncertainty and Profit. Boston and New York: Houghton Mifflin Co, 1921. 8vo. Publisher's maroon cloth, spine lettered in gilt. Custom cloth folding case. Provenance 'S. Goldman/ Dec 1930' (inscription to endpaper; Hon. Stanley C. Wisniewski (pencil inscription). A FINE COPY OF THE FIRST PUBLICATION OF KNIGHT'S IMPORTANT DISTINCTION BETWEEN RISK AND UNCERTAINTY. Based on Knight's 1916 doctoral dissertation at Cornell (A Theory of Business Profit), Risk, Uncertainty and Profit defines 'risk' as 'a measurable uncertainty,' and insurable; while 'uncertainty' combines randomness with unknowable probabilities, and is the source of profit. Entrepreneurs must use their critical judgement as to whether to engage in business activity or not in the face of uncertainty, inasmuch as the probability distribution of the random outcome is unknown. It also introduced what later became the standard diagrammatic exposition of the theory of production — with total, average, and marginal cost curves — and was one of the earliest presentations of the 'law of variable proportions' in the theory of production. For further information on this lot please visit Bonhams.com For further information about this lot please visit the lot listing