IN CONTEXT
Decision making
Frank Knight (1885–1972)
1738 Dutch-Swiss mathematician Daniel Bernoulli formulates a theory of risk aversion and utility.
1953 French economist Maurice Allais discovers a paradox in decision making that contradicts expected utility theory.
1962 US economist Daniel Ellsberg shows how people’s decisions in conditions of uncertainty are not based purely on probability.
1979 Israeli psychologists Daniel Kahneman and Amos Tversky question the rationality of economic decisions in their prospect theory, based on real-life experiments.
There is an element of risk in any business venture or investment in ...
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