TY - JOUR

T1 - Marginal Utility and New Saint Petersburg Paradoxes

AU - Тейлор, Джон А

PY - 2024/8/29

Y1 - 2024/8/29

N2 - Adam Smith may have read Daniel Bernoulli’s 1738 essay on risk, and Smith modified his view on risk while teaching jurisprudence to two Russian students, this essay argues. The matter is important because William Stanley Jevons read Adam Smith closely, of course, but Jevons did not read Daniel Bernoulli, and Jevons convinced Alfred Marshall that the concept of marginal utility did not need the advanced mathematical probability which they could have found in Bernoulli. Jevons thought arguments in English prose, like Smith’s arguments, together with the very simple mathematics of Gregory King were sufficient for discussion of moral expectation (what was later called marginal utility). We begin with the tantalizing suggestion that Adam Smith modeled his famous notion of the invisible hand upon Daniel Bernoulli’s also famous essay about risk. The resemblance between the two was striking. Bernoulli’s essay gained the nickname “The Saint Petersburg Paradox” because the author was at the Imperial Academy of Sciences in Saint Petersburg when he authored the essay and because he published his essay with the proceedings of that same Imperial Academy in Saint Petersburg. Evidence for the connection between Bernoulli and Smith is only circumstantial, however. This present essay lays out the circumstantial evidence, comparing passages from Bernoulli on risk and from Smith on the invisible hand and on what Smith called the lottery of employment.

AB - Adam Smith may have read Daniel Bernoulli’s 1738 essay on risk, and Smith modified his view on risk while teaching jurisprudence to two Russian students, this essay argues. The matter is important because William Stanley Jevons read Adam Smith closely, of course, but Jevons did not read Daniel Bernoulli, and Jevons convinced Alfred Marshall that the concept of marginal utility did not need the advanced mathematical probability which they could have found in Bernoulli. Jevons thought arguments in English prose, like Smith’s arguments, together with the very simple mathematics of Gregory King were sufficient for discussion of moral expectation (what was later called marginal utility). We begin with the tantalizing suggestion that Adam Smith modeled his famous notion of the invisible hand upon Daniel Bernoulli’s also famous essay about risk. The resemblance between the two was striking. Bernoulli’s essay gained the nickname “The Saint Petersburg Paradox” because the author was at the Imperial Academy of Sciences in Saint Petersburg when he authored the essay and because he published his essay with the proceedings of that same Imperial Academy in Saint Petersburg. Evidence for the connection between Bernoulli and Smith is only circumstantial, however. This present essay lays out the circumstantial evidence, comparing passages from Bernoulli on risk and from Smith on the invisible hand and on what Smith called the lottery of employment.

KW - Д. Бернулли, У. Джевонс, невидимая рука рынка, предельная полез-ность, риск, А. Смит.

KW - D. Bernoulli

KW - invisible hand

KW - A. Smith

KW - risk

KW - marginal utility

KW - W. Jevons

UR - https://www.mendeley.com/catalogue/793fc9e8-e477-3717-9877-15cbe82a0120/

U2 - 10.21638/spbu02.2024.313

DO - 10.21638/spbu02.2024.313

M3 - Article

VL - 69

SP - 758

EP - 773

JO - ВЕСТНИК САНКТ-ПЕТЕРБУРГСКОГО УНИВЕРСИТЕТА. ИСТОРИЯ

JF - ВЕСТНИК САНКТ-ПЕТЕРБУРГСКОГО УНИВЕРСИТЕТА. ИСТОРИЯ

SN - 1812-9323

IS - 3

ER -