Prisme N°16
Pierre-Charles Pradier
Prisme N°16 March 2010 (513.4 KiB)
Condorcet proposed a principle of reasonable probability: actions entailing a prohibitive risk with a non-negligible probability should not be taken. This principle guides the development of knowledge as much as it guides the action itself. The mathematics developed by Laplace has allowed for the effective application of this principle in mathematical statistics (point estimates combined with a high confidence level) or in the management of insurance companies (calculating the loading rate to ensure the solvency of the company). During the same period, Tetens was developing related ideas – though with less mathematical efficacy. These ideas from the 18th century still apply today, both in (the interpretation of) certain modern decision models and in the informational and legal requirements that should be enforced to ensure that financial decisions are rational.
