Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-28T08:25:42.040Z Has data issue: false hasContentIssue false
  • English
  • Français

Do Prudent Agents Play Lotteries? Von Neumann's Contribution to the Theory of Rational Behavior

Published online by Cambridge University Press:  11 June 2009

Nicola Giocoli
Nicola Giocoli
Affiliation:
Department of Economics, University of Pisa, via Curtatone e Montanara 15, 56126, Pisa, Italy. E-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Extract

The year 2003 marked the 100th anniversary of the birth of John von Neumann (1903–1957), one of greatest geniuses of the last century. Beyond contributing to fields as diverse as set theory, quantum mechanics, atomic energy, and automatic computing, von Neumann has also had a decisive influence upon modern economics. From the invention of game theory to the axiomatization of expected utility, from the introduction of convex analysis and fixed-point techniques to the development of the balanced growth model, the von Neumann heritage can be clearly traced in several areas of our discipline. The aim of this paper is to clarify the relationship between the two concepts of rationality he devised in his classic 1944 book Theory of Games and Economic Behavior, written with the collaboration of the Austrian economist Oskar Morgenstern (von Neumann and Morgenstern 1953).

Type
Research Article
Information
Journal of the History of Economic Thought , Volume 28 , Issue 1 , March 2006 , pp. 95 - 109
Copyright
Copyright © The History of Economics Society 2006

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Baumol, W. J. (1951) The Neumann-Morgenstern Utility Index: An Ordinalist View, Journal of Political Economy, 59 (1), pp. 61–66.CrossRefGoogle Scholar
Bicchieri, C. (1992) Two Kinds of Rationality, in: De Marchi, Neil (Ed) Post-Popperian Methodology in Economics: Recovering Practice (Boston, MA: Kluwer), pp. 155–88.Google Scholar
Davis, J. B. (2002) The Emperor's Clothes, Journal of the History of Economic Thought, 24 (2), pp. 141–54.CrossRefGoogle Scholar
Ellsberg, D. (1954) Classic and Current Notions of “Measurable” Utility, Economic Journal, 64 (09), pp. 528–56.CrossRefGoogle Scholar
Fishburn, P. C. (1989) Retrospective of the Utility Theory of von Neumann and Morgenstern, Journal of Risk and Uncertainty, 2 (2), pp. 127–58.CrossRefGoogle Scholar
Gibbons, R. (1992) A Primer in Game Theory (New York: Harvester Wheatsheaf).Google Scholar
Gilboa, I. (1987) Expected Utility with Purely Subjective Non-additive Probabilities, Journal of Mathematical Economics, 16 (1), pp. 65–88.CrossRefGoogle Scholar
Giocoli, N. (2003a) Modeling Rational Agents: From Interwar Economics to Early Modern Game Theory (Cheltenham: Edward Elgar).CrossRefGoogle Scholar
Giocoli, N. (2003b) Fixing the Point: The Contributions of Early Game Theory to the Tool Box of Modern Economics, Journal of Economic Methodology, 10 (1), pp. 1–39.CrossRefGoogle Scholar
Jevons, W. S. (1879) The Theory of Political Economy, 2nd edition (New York: A.M. Kelley, 1965).Google Scholar
Luce, R. D. and Raiffa, H. (1957) Games and Decisions (New York: John Wiley and Sons).Google Scholar
Mariotti, M. (1997) Decision in Games: Why There Should Be a Special Exemption from Bayesian Rationality, Journal of Economic Methodology, 4 (1), pp. 43–60.CrossRefGoogle Scholar
Marshall, A. (1890) Principles of Economics, 9th (variorum) edition (London: Macmillan, 1961).Google Scholar
Mirowski, P. (2002) Machine Dreams: Economics Becomes a Cyborg Science (Cambridge: Cambridge University Press).Google Scholar
Montesano, A. (1998) Rationality in Economics: a General Framework, Proto Sociology, 12 (Special Edition), pp. 290–96.Google Scholar
Morgenstern, O. (1976) The Collaboration between Oskar Morgenstern and John von Neumann on the Theory of Games, Journal of Economic Literature, 14 (3), pp. 805–16.Google Scholar
Rellstab, Ü. (1992) New Insights into the Collaboration between John Von Neumann and Oskar Morgenstern on the Theory of Games and Economic Behavior, in: Weintraub, E. Roy (Ed) Toward a History of Game Theory (Durham: Duke University Press), pp. 77–93.Google Scholar
Robertson, D. H. (1952). Utility and All That and Other Essays (London: Allen and Unwin).Google Scholar
Savage, L. J. (1954) The Foundations of Statistics (New York: John Wiley and Sons).Google Scholar
Schmeidler, D. (1989) Subjective Probability and Expected Utility without Additivity, Econometrica, 57 (3), pp. 571–87.CrossRefGoogle Scholar
von Neumann, J. (1928) On the Theory of Games of Strategy, in: Luce, R. Duncan and Tucker, Albert W. (Eds) Contributions to the Theory of Games, Volume IV (Princeton: Princeton University Press, 1959), pp. 13–42.Google Scholar
von Neumann, J. and Morgenstern, O. (1953) Theory of Games and Economic Behavior, 3rd edition (Princeton: Princeton University Press, 1980).Google Scholar
von Plato, J. (1994) Creating Modern Probability (Cambridge: Cambridge University Press).CrossRefGoogle Scholar
Wald, A. (1945) Statistical Decision Functions Which Minimize the Maximum Risk, Annals of Mathematics, 46 (2), pp. 265–80.CrossRefGoogle Scholar
Wald, A. (1950) Statistical Decision Functions (New York: John Wiley & Sons).Google Scholar