Abstract:
This article argues that Keynes's inquiry into probability constitutes a theory of rational choice under uncertainty that is distinct from the subjective probability approach. Ramsey's theoretical treatment, in contrast to Keynes's, anticipates the mathematization of economic theory by introducing the possibility of numerically precise expressions of expectations under uncertainty. His essay reveals how this approach relies on idealized formalizations, most notably illustrated through the analogy between decision-making and betting. In doing so, Ramsey's account aims to provide a descriptive analysis of human behaviour under uncertainty. Both analyses indicate the limits to the mathematical inquiry of decisions under uncertainty by exposing the limits of induction. While this issue remains largely absent from Ramsey's analysis, it is constitutive of Keynes's account. Thus, although both approaches seek to develop concepts of rational choice under conditions of incomplete knowledge, the normative issues arising from the epistemic conception of uncertainty central to Keynes's analysis remain excluded from Ramsey's inquiry. Contrasting the two accounts reveals how distinct analyses of the economy can be traced back to different epistemic standpoints on uncertainty in decision-making.
