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Comment on D. Bernoulli (1738)

Expected utility theory Bernoulli comment error

Cite as:

Ole Peters (2019). Comment on D. Bernoulli (1738). RESEARCHERS.ONE, https://www.researchers.one/article/2019-05-1.


Daniel Bernoulli’s study of 1738 [1] is considered the beginning of expected utility theory. Here I point out that in spite of this, it is formally inconsistent with today’s standard form of expected utility theory. Bernoulli’s criterion for participating in a lottery, as written in [1], is not the expected change in utility.