Keynes as the first behavioral economist: the case of the attribute-substitution heuristic

Abstract:

The present article demonstrates that Keynes’s analysis of inferential judgment and assimilation that was inherent in his theory of fundamental uncertainty is consistent with and historically a predecessor of attribute-substitution accounts of models of heuristic judgment, which are used in modern behavioral economics. This conclusion is important because it associates Keynes’s theory of fundamental uncertainty with contemporary psychology, it explains key ideas of the former in terms of cognitive psychology, and it strengthens the importance of Keynesian psychological concerns for the development of contemporary behavioral economics.

Key Words::

• economic methodology
• experimental behavior
• uncertainty
• expectations
• behavioral economics
• Keynes
• post Keynesian

Additional information

Notes on contributors

Thodoris T. Koutsobinas

Thodoris T. Koutsobinas is a lecturer in the Department of Cultural Heritage and New Technologies at the University of Patras, Greece.