8 - Risk, Uncertainty, and Economic Exchange in a Pastoral Community of the Andean Highlands (Huancar, N.W. Argentina)

Summary

INTRODUCTION

In economic anthropology and cultural ecology in recent years, there has been an increase of interest in the analysis of decisions made under risk and uncertainty conditions (for a general view see Barlett 1980; Cashdan 1990a; DeGarine & Harrison 1988; Halstead & O'Shea 1989). In spite of this effort, there is still no clear consensus in the literature about how risk and uncertainty should be precisely defined. However, Cashdan (1990b: 1, 2) proposes a definition which condenses the main uses of both terms. I will follow her definition in this analysis of trade; “risk” will designate unpredictable fluctuations in the ecological and economic conditions (objective probabilities) and “uncertainty” will refer to situations in which the actors are insufficiently informed about the socioeconomic conditions of the trade (subjective probabilities).

In contrast to traditional macroeconomics, approaches which take into account risk and uncertainty do not proceed from the assumption that actors can accurately predict the occurrence of an event. A basic supposition is that in their decision making, the actors have to consider estimations of probabilities about the consequences of their actions. This means that pure maximization of utility (e.g., maximization of production outcomes or of exchange rates) is not the principal aim underlying their decisions; but this maximization also takes into account risk and uncertainty factors (Cashdan 1990b: 2–6).