Author of several theoretical and applied economics studies, He was also responsible for early work in
Behavioral economics, which in the US is generally attributed to
Daniel Kahneman and
Amos Tversky. In the 1940s, Allais worked on "decision theory" (or "theory of choice") under uncertainty and developed a theory of
cardinal utility. Due to war conditions and his commitment to publish in French, his work was undertaken independently of
Theory of games and economic behavior developed by
John von Neumann and
Oskar Morgenstern. He formulated the
Allais paradox in 1953, which questions the traditional model of rationality of choices and contradicts the
expected utility hypothesis.
Liberalism and socialism Although he participated in the
Mont Pelerin Society, Allais was convinced of an affinity between liberalism and socialism, stating: "'For the true liberal, as for the true socialist, it matters little whether the means of production are privately or collectively owned, so long as the essential goals they pursue, namely efficiency and justice, are achieved." He advocated "competitive planning" as a "possible synthesis of liberalism and socialism." In 1959, he and other French members of Mont Pelerin such as
Jacques Rueff established an organization,
Mouvement pour une société libre, which spoke readily of a
social liberalism that would go "beyond
laissez-faire and socialism." It was praised by
Milton Friedman in 1968 with the following words: "
This work [the HRL formulation]
introduces a very basic and important distinction between psychological time and chronological time. It is one of the most important and original paper that has been written for a long time ... for its consideration of the problem of the formation of expectations". Allais's contribution has nevertheless been "lost": it has been absent from the debate about expectations.
Position against globalization On the first page, he dedicates his book
La mondialisation: destruction des emplois et de la croissance (1990),
Globalization: destruction of jobs and growth,
"To the countless victims worldwide of the free-trade ideology, ideology as fatal as it is erroneous, and to all those who are not blind to some partisan passion". Allais believes that Ricardo's theory is valid only in a steady state, but disappears when the specializations evolve and when the capital is mobile. According to him, In his opinion, crisis and globalization are linked:
"The financial and banking crisis which, is only the spectacular symptom of a deeper economic crisis: the deregulation of competition in the global labor market". "Current unemployment is due to this total liberalization of trade[...] As such, it constitutes a major foolishness, starting from an unbelievable contradiction. Just as attributing the crisis of 1929 to protectionist causes is a historical contradiction. The true origin was already in the careless development of credit in the years preceding it." In 1992, Allais criticised the
Maastricht Treaty for its excessive emphasis on
free trade. He also expressed reservations on the
single European currency. In 2005, he expressed similar reservations concerning the
European Constitution. ==Physics==