Money, Banks and Finance in Economic Thought

Not a Behaviorist. Samuelson’s Contributions to Utility Theory in the Harvard Years, 1936–1940

Moscati Ivan, University of Insubria

In this paper I review the contributions to utility theory that Samuelson made when he was a Ph.D. student at Harvard, from the first scientific papers he began writing in 1936 to the Ph.D. dissertation he submitted in November 1940. Based on this review, I make three points: (1) after exploring contrasting research paths during the years 1936–1937, Samuelson’s stance on utility analysis quickly stabilized and, from around mid-1938, he became an advocate of an ordinal-utility approach to choice theory; (2) accordingly, the widespread image of the young Samuelson as a committed behaviorist who wanted to free economic analysis from the utility concept is misleading; (3) the so-called Das Paul Samuelson Problem, that is, the question of whether Samuelson changed his mind on utility analysis between 1938 and 1948–1950, has either a negative answer or is ill-posed.

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Keywords: Paul A. Samuelson, Utility theory, Ordinal utility, Revealed preference theory, Cardinal utility