A Swiss mathematician remembered most for his pioneering work in probability and statistics. Bernoulli developed utility theory in 1738, which demonstrated that the utility of money and the state of one’s wealth is more important than its intrinsic value (i.e., a gift of 10 ducats has the same utility to someone with 100 ducats as 20 ducats has to someone with 200 ducats). Kahneman and Tversky adapted utility theory and addressed some of its flaws in creating prospect theory.
Daniel Bernoulli Character Timeline in Thinking, Fast and Slow
The timeline below shows where the character Daniel Bernoulli appears in Thinking, Fast and Slow. The colored dots and icons indicate which themes are associated with that appearance.
Part 4, Chapter 25
Part 4, Chapter 26
...$500 for sure. In both problems, the final states of wealth are identical. According to Bernoulli’s theory, people should have the same preferences in both. In reality, people are risk-averse in... (full context)
Part 4, Chapter 29