You probably have heard of Pascal’s Wager, but have you heard of Kant’s Bet? Immanuel Kant, the 18th century moral philosopher, famous for his discussion of the categorical imperative, has an interesting section bearing on economics in his Canon of Pure Reason (which comes at the conclusion of his Critique of Pure Reason).
In the section discussion epistemology, entitled, “Opining, Knowing, and Believing,” Kant explores the difference between subjective conviction that something is true and objective certainty. The personal basis for such a judgment depends in part on the strength of the subjective belief. Talking specifically about pragmatic beliefs, which adhere to some activity and particular action, Kant writes:
The usual touchstone, whether that which someone asserts is merely his persuasion — or at least his subjective conviction, that is, his firm belief — is betting. It often happens that someone propounds his views with such positive and uncompromising assurance that he seems to have entirely set aside all thought of possible error. A bet disconcerts him. Sometimes it turns out that he has a conviction which can be estimated at a value of one ducat, but not of ten. For he is very willing to venture one ducat, but when it is a question of ten he becomes aware, as he had not previously been, that it may very well be that he is in error. If, in a given case, we represent ourselves as staking the happiness of our whole life, the triumphant tone of our judgment is greatly abated; we become extremely diffident, and discover for the first time that our belief does not reach so far. Thus pragmatic belief always exists in some specific degree, which, according to differences in the interests at stake, may be large or may be small.
In such a way, we can arrive a subjective value of actual beliefs, while at the same time exposing the truth that full subjective conviction cannot be immediately translated into objective certainty. Thus we have Kant’s Bet, not something Kant invented of course, but merely passes along to us as part of the philosophical tradition.
In the twentieth century, Italian statistician Bruno de Finetti came up with a rather more refined and complex version of something like Kant’s Bet, designed as “a method to gauge someone’s confidence in the chances of a given event occurring by measuring it against a lottery with a known probability” (See The De Finetti Game via the evangelical outpost). All this really is a philosophical way of getting at the old cliché, “Put your money where your mouth is.”