Frank Knight
| Frank Hyneman Knight | |
|---|---|
| Born |
7 November 1885 McLean County, Illinois |
| Died | 15 April 1972 (aged 86) Chicago, Illinois |
| Institution |
Cornell University University of Chicago University of Iowa |
| Field | Risk Theory Profit Theory Value Theory |
| School or tradition |
Chicago School of Economics |
| Alma mater |
Milligan College University of Tennessee Cornell University |
| Influences |
Clarence Edwin Ayres John B. Clark Herbert J. Davenport Allyn A. Young Alvin S. Johnson |
| Influenced |
Ronald Coase Steven N. S. Cheung George Stigler Milton Friedman James M. Buchanan Charles E. Lindblom David Rockefeller Henry Simons |
| Contributions | Knightian uncertainty |
| Awards | Francis A. Walker Medal (1957) |
Frank Hyneman Knight (November 7, 1885 – April 15, 1972) was an American economist who spent most of his career at the University of Chicago, where he became one of the founders of the Chicago school. Nobel laureates Milton Friedman, George Stigler and James M. Buchanan were all students of Knight at Chicago. Ronald Coase said that Knight, without teaching him, was a major influence on his thinking. F.A. Hayek considered Knight to be one of the major figures in preserving and promoting classical liberal thought in the twentieth century.
Knight (B.A., Milligan College,1911; B.S. and A.M., Tennessee, 1913; Ph.D., Cornell, 1916) was born in 1885 in McLean County, Illinois, the son of Julia Ann (Hyneman) and Winton Cyrus Knight. After his early study at the University of Tennessee, most of his academic career was spent at the University of Chicago, where he was the Morton D. Hall Distinguished Service Professor, Emeritus, of Social Science and Philosophy. Knight was one of the world's leading economists, having made significant contributions to many problems of both economic theory and social philosophy. He is best known for his Risk Uncertainty and Profit, a monumental study of the role of the entrepreneur in economic life. In 1950 he was president of the American Economic Association and in 1957 the recipient of its coveted Francis A. Walker Award, given "not more frequently than once every five years to the living (American) economist who in the judgment of the awarding body has during his career made the greatest contribution to economics." His ashes are interred in the crypt of First Unitarian Church of Chicago.
Knight is best known as the author of the book Risk Uncertainty and Profit, based on his Ph.D. dissertation at Cornell University. In that book, he carefully distinguished between economic risk and uncertainty. Situations with risk were those where the outcomes were unknown but governed by probability distributions known at the outset. He argued that these situations, where decision making rules such as maximising expected utility can be applied, differ in a deep way from "uncertain" ones, in which not only the outcomes, but even the probability models that governed them, were unknown. Knight argued that uncertainty gave rise to economic profits that perfect competition could not eliminate.
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