INST 354 Lecture 8: INST354 Lecture 8: Invention of Modern Decision Making
10 Feb 2019
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Inst354 lecture 8: invention of modern decision making. It began in renaissance italy, for example, in the analysis of the practice of gambling by scholars such as girolamo cardano (1501 1576), a true. Renaissance man who was simultaneously a mathematician, physician, accountant, and inveterate gambler. (he is also credited with inventing the combination lock. ) In spite of his profound insights into risky decision making, he tended to lose, because his analyses of the numerical structure of random situations were accompanied by lousy arithmetic skills. 1944 omitted some of the most important analyses of decision making, so we cite the 1947 edition. ) Von neumann and morgenstern provided a theory of decision making according to the principle of maximizing expected utility. The book does not discuss behavior per se; rather, it is a purely mathematical work that applies utility theory to optimal economic decisions.
