J M Keynes’s Contribution to Solving the Certainty Effect Problem: How Some Philosophers Overlooked Keynes’s Conventional Coefficient of Weight and Risk, C

Abstract

J M Keynes solved the problems of the certainty, reflection, translation, and preference reversal effects long before these effects were specified in the post world war II literature by psychologists. Keynes recognized in chapter 26 of the A Treatise on Probability (1921; p.313) that all of these effects were a result of non linear probability preferences on the part of the decision maker. An understanding of Keynes’s contribution would have helped philosophers, such as I. Levi and B. Weatherson, to deal with this problem.