The Development of Utility Theory. II

E precise shape of the utility function received little attention in the . main tradition of utility theory. Occasionally it was stated that the marginal utility of a necessity falls rapidly as its quantity increases and the like; and there were some mystical references to the infinite utility of subsistence. These were ad hoc remarks, however, and were not explicitly developed parts of the formal theory. Only one hypothesis about the marginal utility function ever achieved prominence: it was the Bernoulli hypothesis, which ultimately merged with the Weber-Fechner law, and to this literature we now turn. In 1713 Nicholas Bernoulli proposed to a French mathematician, Montmort, five problems in probability theory,II3 one of which was equivalent to the following: