Expected Utility Hypothesis - its origin and development

The following thesis introduces the origin of Expected Utility Hypothesis with its historical background and describes its early development. In the first chapter, the history and solutions to St. Petersburg Paradox are presented, as it is closely related to the von Neumann-Morgenstern Expected Utility Theory which is the core notion of the thesis. In the second chapter, Expected Utility Theory is thoroughly analysed basing on the original publication of von Neumann and Morgenstern (Von Neumann and Morgenstern, 1953). Their axiomatisation together with the interpretation of the axioms concludes the first part of the chapter. Next, the basic notions of decision theory utilising the concept of expected utility is presented. Finally, the third chapter is devoted to the presentation of Maurice Allais’s critique of the theory and the analysis of his paradox with the brief description of modern psychological reason for Expected Utility Theory violations.
Praca magisterska obroniona na Wydziale Zarządzania i Ekonomii Politechniki Gdańskiej dnia 13.07.2016.
Golik, J. (2016). Expected Utility Hypothesis - its origin and development