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On the use of the art of conjecture in juridical matters: what about (political) economics? (De usu artis conjectandi in jure: quid de oeconomia (politica)?) (French. English summary) Zbl 1111.01003

The author looks into the question as to when and how economics adopted statistical/probabilistic (or stochastic) methods. The paper mentions briefly how Xenophon and Aristotle defined economics, then moves on to the age of Enlightenment when the “political arithmetic” was of interest. This is also time when emphasis shifted from an object to a method. In the first 30 years of the 20th century, political economics was recharacterized as the science of economics, or the science of rational choice (with the postulate of rationality). The author’s thesis is that the Bernoullis contributed largely to define this notion of rationality in economics, and the main portion of the paper intends to justify this thesis. Jakob, Nicolas and Daniel Bernoulli are responsible for these foundations.
The Ars conjectandi deals with coherence of decisions while De usu concerns proper norms of justice in law. Jakob views rational decisions as logic of reasoning and the author refers to chapter II, axioms VI, VII, IX. Nicolas exploits the principle of mathematical expectation. His work lays groundwork for the notion of rationality in economics, through considerations of competing parties with same mercantile interests. This is further expounded on by Daniel, who illustrates his reasoning through practical mercantile examples in his work at the St. Petersburg Academy. He introduces the notions of mercantile prudence and sees his theory as a continuous extension of stochastics applicable beyond its original meaning.
The author then further follows the questions as to why statistics (stochastics) have regained its central role in economics in the XX-th century. He points out that answers can be sought in two major debates separated by a phase of uncertainty. The influence of Knight (difference between risk and uncertainty) and Keynes (at the opposite end; subjective and objective probabilities) is discussed and a question whether Darwinian theory has won in economics thought is posed. Between economics as application and theoretical economics, which is in perpetual crisis, there is room for modern use of stochastics/statistics in economics.

MSC:

01A50 History of mathematics in the 18th century
62C99 Statistical decision theory
91B99 Mathematical economics
60-03 History of probability theory
62-03 History of statistics
91-03 History of game theory, economics, and finance
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