Peter L. Bernstein

3. « The combination of the cool mathematics of game theory and the tensions of economics seemed a natural fit for a mathematician with an enthusiasm for economics and an economist with an enthusiasm for mathematics. But the stimulus to combine the two arose in part from a shared sense that, to use Morgenstern's words, the application of mathematics to economics was "in lamentable condition."
An imperial motivation was also there – the aspiration to make mathematics the triumphant master in the analysis of society as well as in the analysis of the natural sciences. While that approach would be welcomed by many social scientists today, it was probably the main source of resistance that game theory encountered when it was first broadly introduced in the late 1940s. Keynes ruled the academic roost at the time, and he rejected any sort of mathematical description of human behaviour. » (p. 237)

2. « Up to now, our story has focused on theories about probability and on ingenious ways of measuring it : Pascal's Triangle, Jacob Bernoulli's search for moral certainty in his jar of black and white balls, Bayes's billiard table, Gauss's bell curve, and Galton's Quincunx. Even Daniel Bernoulli, delving for perhaps the first time into the psychology of choice, was confident that what he called utility could be measured.
Now we turn to an exploration of a different sort : Which risks should we take, which risks should we hedge, what information is relevant ? How confidently do we hold our beliefs about the future ? In short, how do we introduce management into dealing with risk ? » (p. 187)

4. « All of us think of ourselves as rational beings even in times of crisis, applying the laws of probability in cool and calculated fashion to the choices that confront us. We like to believe we are above-average in skills, intelligence, farsightedness, experience, refinement, and leadership. Who admits to being an incompetent driver, a feckless debater, a stupid investor, or a person with an inferior taste in clothes ?
Yet how realistic are such images ? Not everyone can be above average. Furthermore, the most important decisions we make usually occur under complex, confusing, indistinct or frightening conditions. Not much time to consult the laws of probability. Life is not a game of balla. […]
And yet most humans are not utterly irrational beings who take risks without forethought or who hide in a closet when anxiety strikes. […] The issue, rather, is the degree to which the reality in which we make our decisions deviates from the rational decision models of the Bernoullis, Jevons, and von Neumann. Psychologists have spawned a cottage industry to explore the nature and causes of these deviations. » (p. 269)

1. « One winter night during one of the many German air raids on Moscow in World War II, a distinguished Soviet professor of statistics showed up in his local air-raid shelter. He had never appeared there before. "There are seven million people in Moscow," he used to say. "Why should I expect them to hit me ?" His friends were astonished to see him and asked what had happened to change his mind. "Look," he explained, "there are seven million people in Moscow and one elephant. Last night they got the elephant." » (p. 116)