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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: giocoli@mail.jus.unipi.it.
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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

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