An Analysis that Answers F.Y.Edgeworth's Question, Put to the Logicians and Philosophers Who Read the Journal Mind, Concerning the Importance of Evaluating the Role Played by Keynes's Conventional Coefficient of Risk and Weight, C, in Decision Making

19 Pages Posted: 1 Jul 2010

See all articles by Rogério Arthmar

Rogério Arthmar

Universidade Federal do Espirito Santo

Michael Emmett Brady

California State University, Dominguez Hills

Date Written: June 29, 2010

Abstract

In 1922, F.Y. Edgeworth asked the readers of the world’s leading philosophy journal Mind for help in analyzing Keynes’s conventional coefficient of risk and weight, c. Keynes had created the first decision rule in history that generalized the linear and additive expected value and expected utility rules to include non linearity and non additivity. Edgeworth received no answer from the readers of Mind. This paper shows why the c coefficient was so important and how Keynes integrated his weight of the evidence index, w, into his technical mathematical elasticity analysis in Chapter 21 and Section four of Chapter 15 of the General Theory.

It is also shown that Ramsey’s subjectivist, Bayesian approach is a special case of Keynes’s general theory of decision making under risk and uncertainty. Ramsey’s objections to Keynes’s approach is demonstrated to be baseless because it is based on the work of George Boole.

Keywords: Keynes, Edgeworth, conventional coefficient of risk and weight, Boole

JEL Classification: B16, C02, C10

Suggested Citation

Arthmar, Rogério and Brady, Michael Emmett, An Analysis that Answers F.Y.Edgeworth's Question, Put to the Logicians and Philosophers Who Read the Journal Mind, Concerning the Importance of Evaluating the Role Played by Keynes's Conventional Coefficient of Risk and Weight, C, in Decision Making (June 29, 2010). Available at SSRN: https://ssrn.com/abstract=1632318 or http://dx.doi.org/10.2139/ssrn.1632318

Rogério Arthmar

Universidade Federal do Espirito Santo ( email )

Rua Fernando Ferrari 514
Bairro Goiabeiras
Vitória, Espírito Santo 59075-910
Brazil

HOME PAGE: http://www.ufes.br

Michael Emmett Brady (Contact Author)

California State University, Dominguez Hills ( email )

1000 E. Victoria Street, Carson, CA
Carson, CA 90747
United States

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