Keynes's Methodology and the Analysis of Economic Agent Behavior in a Complex World

Richard Arena and Eric Nasica

No 2021-10, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: This article aims to analyze the impact of taking into account a truly uncertain and complex economic environment on the methodology used by Keynes. Our work leads to two main results. The first conclusion is that, even when an ordinal or cardinal measure of probability is impossible, Keynes provides a coherent set of tools for the analysis of economic decisions. In particular, even if a numerical probability cannot be determined, the choices of economic agents will be rationally governed by reasoning based on their limited but real knowledge of the observed reality and on non-numerical probabilities. The second result obtained is that the complex decision-making environment surrounding economic decisions influences the characterization of the individual actor himself and economic and social interactions; this form of economic analysis implies referring to a methodological conception which is open to and even requires the use of philosophy and other social sciences as cognitive psychology, social psychology and even anthropology.

Pages: 27 pages
Date: 2021-03
New Economics Papers: this item is included in nep-cwa, nep-hme, nep-hpe and nep-pke
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Citations: View citations in EconPapers (1)

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