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St. Petersburg Paradox
The St. Petersburg paradox or St. Petersburg lottery is a paradox involving the game of flipping a coin where the expected payoff of the lottery game is infinite but nevertheless seems to be worth only a very small amount to the participants. The St. Petersburg paradox is a situation where a naïve decision criterion that takes only the expected value into account predicts a course of action that presumably no actual person would be willing to take. Several resolutions to the paradox have been proposed, including the impossible amount of money a casino would need to continue the game indefinitely. The problem was invented by Nicolas Bernoulli, who stated it in a letter to Pierre Raymond de Montmort on September 9, 1713. Translated by However, the paradox takes its name from its analysis by Nicolas' cousin Daniel Bernoulli, one-time resident of Saint Petersburg, who in 1738 published his thoughts about the problem in the ''Commentaries of the Imperial Academy of Science of Saint ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Paradox
A paradox is a logically self-contradictory statement or a statement that runs contrary to one's expectation. It is a statement that, despite apparently valid reasoning from true or apparently true premises, leads to a seemingly self-contradictory or a logically unacceptable conclusion. A paradox usually involves contradictory-yet-interrelated elements that exist simultaneously and persist over time. They result in "persistent contradiction between interdependent elements" leading to a lasting "unity of opposites". In logic, many paradoxes exist that are known to be invalid arguments, yet are nevertheless valuable in promoting critical thinking, while other paradoxes have revealed errors in definitions that were assumed to be rigorous, and have caused axioms of mathematics and logic to be re-examined. One example is Russell's paradox, which questions whether a "list of all lists that do not contain themselves" would include itself and showed that attempts to found set theory on ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Marginal Utility
Marginal utility, in mainstream economics, describes the change in ''utility'' (pleasure or satisfaction resulting from the consumption) of one unit of a good or service. Marginal utility can be positive, negative, or zero. Negative marginal utility implies that every consumed additional unit of a commodity causes more harm than good, leading to a decrease in overall utility. In contrast, positive marginal utility indicates that every additional unit consumed increases overall utility. In the context of cardinal utility, liberal economists postulate a law of diminishing marginal utility. This law states that the first unit of consumption of a good or service yields more satisfaction or utility than the subsequent units, and there is a continuing reduction in satisfaction or utility for greater amounts. As consumption increases, the additional satisfaction or utility gained from each additional unit consumed falls, a concept known as ''diminishing marginal utility.'' This idea is us ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cumulative Prospect Theory
In behavioral economics, cumulative prospect theory (CPT) is a model for descriptive decisions under risk and uncertainty which was introduced by Amos Tversky and Daniel Kahneman in 1992 (Tversky, Kahneman, 1992). It is a further development and variant of prospect theory. The difference between this version and the original version of prospect theory is that weighting is applied to the cumulative probability distribution function, as in rank-dependent expected utility theory but not applied to the probabilities of individual outcomes. In 2002, Daniel Kahneman received the Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics, in particular the development of CPT. Outline of the model The main observation of CPT (and its predecessor prospect theory) is that people tend to think of possible outcomes usually relative to a certain reference point (often the status quo) rather than to the final status, a phenomenon which is called framin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
A Bird In The Hand Is Worth Two In The Bush
Below is an alphabetical list of widely used and repeated proverbial phrases. If known, their origins are noted. A proverbial phrase or expression is a type of conventional saying similar to a proverb and transmitted by oral tradition. The difference is that a proverb is a fixed expression, while a proverbial phrase permits alterations to fit the grammar of the context. In 1768, John Ray defined a proverbial phrase as: A * A bad excuse is better than none * A bad penny always turns up * A bad workman blames his tools * A bird in the hand is worth two in the bush * A cat may look at a king * A chain is only as strong as its weakest link * A dog is a man's best friend * A drowning man will clutch at a straw * A fool and his money are soon parted * A friend in need (is a friend indeed) * A friend to everyone is a friend to no one * A journey of a thousand miles begins with a single step * A little learning is a dangerous thing * A leopard cannot change its spots * A ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Amos Tversky
Amos Nathan Tversky (; March 16, 1937 – June 2, 1996) was an Israeli cognitive and mathematical psychologist and a key figure in the discovery of systematic human cognitive bias and handling of risk. Much of his early work concerned the foundations of measurement. He was co-author of a three-volume treatise, ''Foundations of Measurement''. His early work with Daniel Kahneman focused on the psychology of prediction and probability judgment; later they worked together to develop prospect theory, which aims to explain irrational human economic choices and is considered one of the seminal works of behavioral economics. Six years after Tversky's death, Kahneman received the 2002 Nobel Memorial Prize in Economic Sciences for work he did in collaboration with Amos Tversky. While Nobel Prizes are not awarded posthumously, Kahneman has commented that he feels "it is a joint prize. We were twinned for more than a decade." Tversky also collaborated with many leading researchers ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Daniel Kahneman
Daniel Kahneman (; ; March 5, 1934 – March 27, 2024) was an Israeli-American psychologist best known for his work on the psychology of judgment and decision-making as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences together with Vernon L. Smith. Kahneman's published empirical findings challenge the assumption of human rationality prevailing in modern economic theory. Kahneman became known as the "grandfather of behavioral economics." With Amos Tversky and others, Kahneman established a cognitive basis for common human errors that arise from heuristics and biases, and developed prospect theory. In 2011, Kahneman was named by ''Foreign Policy'' magazine in its list of top global thinkers. In the same year, his book '' Thinking, Fast and Slow'', which summarizes much of his research, was published and became a best seller. In 2015, ''The Economist'' listed him as the seventh most influential economist in the world. Kah ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Prospect Theory
Prospect theory is a theory of behavioral economics, judgment and decision making that was developed by Daniel Kahneman and Amos Tversky in 1979. The theory was cited in the decision to award Kahneman the 2002 Nobel Memorial Prize in Economics. Based on results from controlled studies, it describes how individuals assess their loss and gain perspectives in an asymmetric manner (see loss aversion). For example, for some individuals, the pain from losing $1,000 could only be compensated by the pleasure of earning $2,000. Thus, contrary to the expected utility theory (which models the decision that perfectly rational agents would make), prospect theory aims to describe the actual behavior of people. In the original formulation of the theory, the term ''prospect'' referred to the predictable results of a lottery. However, prospect theory can also be applied to the prediction of other forms of behaviors and decisions. Prospect theory challenges the expected utility theory deve ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economic Theory (journal)
Economics () is a behavioral science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyses what is viewed as basic elements within economies, including individual agents and markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and investment expenditure interact; and the factors of production affecting them, such as: labour, capital, land, and enterprise, inflation, economic growth, and public policies that impact these elements. It also seeks to analyse and describe the global economy. Other broad distinctions within economics include those between positive economics, describing "what is", and normative economics, advocating "what o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cumulative Prospect Theory
In behavioral economics, cumulative prospect theory (CPT) is a model for descriptive decisions under risk and uncertainty which was introduced by Amos Tversky and Daniel Kahneman in 1992 (Tversky, Kahneman, 1992). It is a further development and variant of prospect theory. The difference between this version and the original version of prospect theory is that weighting is applied to the cumulative probability distribution function, as in rank-dependent expected utility theory but not applied to the probabilities of individual outcomes. In 2002, Daniel Kahneman received the Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics, in particular the development of CPT. Outline of the model The main observation of CPT (and its predecessor prospect theory) is that people tend to think of possible outcomes usually relative to a certain reference point (often the status quo) rather than to the final status, a phenomenon which is called framin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Behavioral Finance
Behavioral economics is the study of the psychological (e.g. cognitive, behavioral, affective, social) factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by traditional economic theory. Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory. Behavioral economics began as a distinct field of study in the 1970s and 1980s, but can be traced back to 18th-century economists, such as Adam Smith, who deliberated how the economic behavior of individuals could be influenced by their desires. The status of behavioral economics as a subfield of economics is a fairly recent development; the breakthroughs that laid the foundation for it were published through the last three decades of the 20th century. Behavioral economics is still growing as a field, being used increasingly in res ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Zeitschrift Für Nationalökonomie
''Journal of Economics'', founded as ''Zeitschrift für Nationalökonomie'', is an academic journal of economics with an emphasis on Mathematical economics, mathematical Microeconomics, microeconomic theory, although it publishes occasional articles on macroeconomics. ''Zeitschrift für Nationalökonomie'' was first published in 1930, as a revival of an earlier ''Zeitschrift für Volkswirtschaft, Sozialpolitik und Verwaltung'' which was published from 1892 into 1927 (from 1921 under the name ''Zeitschrift für Volkswirtschaft und Socialpolitik''). The initial editor of ''Zeitschrift für Nationalökonomie'' was Hans Mayer, a third-generation member of the Austrian School. Mayer avowedly welcomed contributions from all schools of thought, so long as the work were scientifically rigorous and not List of political ideologies, politically ideological in nature.Hans Mayer: ''Zur Einführung''. In: ''Zeitschrift für Nationalökonomie'', , Volume 1, No 1, pp. 1–3, . It is published by ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Republic And Canton Of Geneva
The Canton of Geneva, officially the Republic and Canton of Geneva, is one of the 26 cantons of the Swiss Confederation. It is composed of forty-five municipalities, and the seat of the government and parliament is in the city of Geneva. Geneva is the French-speaking westernmost canton of Switzerland Switzerland, officially the Swiss Confederation, is a landlocked country located in west-central Europe. It is bordered by Italy to the south, France to the west, Germany to the north, and Austria and Liechtenstein to the east. Switzerland .... It lies at the western end of Lake Geneva and on both sides of the Rhone, its main river. Within the country, the canton borders Vaud to the east, the only adjacent canton. However, most of Geneva's border is with France, specifically the region of Auvergne-Rhône-Alpes. As is the case in several other Swiss cantons (Ticino, canton of Neuchâtel, Neuchâtel, and canton of Jura, Jura), Geneva is referred to as a republic within the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
