1875 Words8 Pages

The Utility Theory Daniel Bernoulli
Eng. Jad Wehbe
Notre Dame University
Zouk Mosbeh, Lebanon jswehbe@ndu.edu.lb I. General Background
Daniel Bernoulli a Swiss mathematician and a physicist, was born in Groningen in the Netherlands on February 8th 1700, and died at the age of 82 years old in Basel on 17th march 1782. He created many applications from mathematics to mechanics, and was one of the people who pioneered and developed theories, and concepts in probability and statistics.
His first Mathematical work began in in 1724, entitled the Exercitationes (mathematical exercices). In 1738 he published his work Hydrodynamica, based on the concept of conservation of energy resulting in a Mathematical law: 1/2 ρ u^2 + P = constant, where P is pressure, ρ is the density and u is the velocity.
In physics his work Hydrodynamica, enabled him to establish the basis and ideas in explaining Boyle 's law about the kinetic theory of gases. He worked with Euler in the development of the Euler-Bernoulli beam equation in elasticity, which played a critical factor in the field of aerodynamics.
Finally in statistics, Bernoulli was the author of the paper “Exposition of a New Theory on the Measurement of Risk” relevant to the St. Petersburg paradox (is a paradox related to probability and decision theory in economics), which was the basis of multiple economic theories of risk aversion, risk premium and utility theory.
In this paper today, I’ll be tackling the different concepts and

Related

## Examples Of St. Petersburg Paradox

1934 Words | 8 Pages2.2.6 The Bernoulli Hypothesis Daniel Bernoulli, the 18th century Swiss mathematician evinced great interest in the problem known as St. Petersburg paradox and tried to resolve this. Bernoulli establish that Russians were reluctant to make bets even at better than 50-50 odds knowing wholly that their mathematical expectations of winning money in a particular kind of gamble were greater the more money they bet. This contradiction is known as St. Petersburg Paradox. St. Petersburg paradox denotes

## Predicting Preferences

1636 Words | 7 PagesPredicting Preferences Prediction involves making a statement concerning the likely value of an event or action uncertain or unknown at the time of the statement. Since the theory of probability, (inaugurated by the French mathematicians Blaise Pascal and Pierre Fermat in 1654), was developed to quantify uncertain events in terms of their likelihood of occurrence, formal prediction is now viewed as a mathematical topic involving probabilistic modeling. Indeed, the mathematician Karl Pearson said

## Decision Theory: a Brief Introduction

28334 Words | 114 PagesDecision Theory A Brief Introduction 1994-08-19 Minor revisions 2005-08-23 Sven Ove Hansson Department of Philosophy and the History of Technology Royal Institute of Technology (KTH) Stockholm 1 Contents Preface ..........................................................................................................4 1. What is decision theory? ..........................................................................5 1.1 Theoretical questions about decisions ......................

### Examples Of St. Petersburg Paradox

1934 Words | 8 Pages### Predicting Preferences

1636 Words | 7 Pages### Decision Theory: a Brief Introduction

28334 Words | 114 Pages