The origins of expected utility theory

Lengwiler, Yvan (2009) in: Vinzenz Bronzin’s Option Pricing Models Exposition and Appraisal. Berlin: Springer, S. 535-546.

This short contribution is not about Vinzenz Bronzin or about option pricing. Rather, the topic I would like to address is another important piece of economic theory, namely the theory of expected utility maximization. It is interesting to note just how many thinkers have contributed to it, and at the same time to realize that the earliest statements of the theory were the most powerful ones, and were followed by weaker conceptions. It just took the field of economics a surprisingly long time to grasp its full potential. I believe that the history of this great piece of theory is instructive, because it is an example of a powerful idea that was assimilated only very slowly and in a roundabout fashion.