Evolution of Utility Theory
If the economic theories developed can be visualized at large, then it can be experienced that most of the researchers across various domains of Economics rely on utility theory, which is one of the oldest theories developed. Considering the consumption pattern of consumers, this theory tells the optimum limit of goods or services to be consumed or procured. This is the theory, which has told the world about the concept of tradeoff, by means of describing the law of diminishing marginal utility. With progression of time, this theory was considered in the framework of probabilistic mathematics, and it has given birth to the theorem of expected utility. This is the extension of the original utility theory, with a probabilistic element attached to every unit piece of consumption by the end user. However, if the history of economic development can be seen at large, then it can be seen that the development of economic theories had taken place in accordance with some of the religious thoughts and beliefs, and development of utility theory is one of those.
The Christianity was divided into two parts, namely Catholics and Protestants. If the Protestants are considered, they used to believe Jesus Christ as a human being, and that belief of absolutism was reflected in the theories developed by them. With the development of Calculus, utility theory started to develop. On the other hand, considering the Catholics, they used to believe Jesus Christ as God. This belief was based on abstractness, which was later reflected in the development of probability mathematics. Within the framework of probability mathematics, utility theory was reshaped and was given the name of expected utility theory. Later on, industrial development and changes in global economic scenario had brought forth major significant changes in these theories. For more information about various aspects of utility theory, kindly browse through the pages of www.assignmentindia.com.