The Study of Man: Dice, Dr. Hayek and the Consumer
It may seem a far cry from shooting dice or playing chess to predicting how a battle between great economic combines will work out. Yet it is in the mathematical laws governing games that economists now hope to find the answers to problems raised by monopoly, economic coalitions, and other deviations from early capitalism’s free market of buyers and sellers—problems which orthodox economic theory has to date been unable to handle.
Mathematics, of course, has never been a stranger to economics. It was introduced on a major scale in the late 19th century in an effort to eliminate the hedonistic assumption of earlier economic thought, which stated that the phenomena of the market could be explained if it were assumed that each “economic” man rationally chose courses of action that avoided “pain” and produced “pleasure.” In the hands of such contemporary writers as J. R. Hicks and A. C. Pigou an elegant theory utilizing the concepts of the infinitesimal calculus has been developed which seemed to make this assumption unnecessary.
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