Francis Ysidro Edgeworth
Francis Ysidro Edgeworth (8 February 1845 – 13 February 1926) was an Anglo-Irish philosopher and political economist who made significant contributions to the methods of statistics during the 1880s. From 1891 onward, he was appointed the founding editor of "The Economic Journal". Life. Edgeworth was born in Edgeworthstown, County Longford, Ireland. He did not attend school, but was educated by private tutors at the Edgeworthstown estate until he reached the age to enter university. His father, Francis Beaufort Edgeworth, was descended from French Huguenots and "was a restless philosophy student at Cambridge on his way to Germany  when he decided to elope with a teenage Spanish refugee Rosa Florentina Eroles he met on the steps of the British Museum. One of the outcomes of their marriage was Ysidro Francis Edgeworth (the name order was reversed later)..." Richard Lovell Edgeworth was his grandfather, and the writer, Maria Edgeworth, was his aunt. His maternal grandfather was the Catalan general Antonio Eroles. As a student at Trinity College Dublin he studied classics getting a scholarship in 1863 and graduating in 1865, and at Balliol College, Oxford, Edgeworth studied ancient and modern languages. A voracious autodidact, he studied mathematics and economics  only after he had completed university. He qualified as a barrister in London in 1877 but did not practise. On the basis of his publications in economics and mathematical statistics in the 1880s, Edgeworth was appointed to a chair in economics at King's College London in 1888, and in 1891, he was appointed Drummond Professor of Political Economy at Oxford University. In 1891, he was also appointed the founding editor of "The Economic Journal". He continued as editor or joint-editor until his death 35 years later. Edgeworth was a highly influential figure in the development of neo-classical  economics. He was the first to apply certain formal mathematical techniques to individual decision making in economics. He developed utility theory, introducing the indifference curve and the famous Edgeworth box, which is now familiar to undergraduate students of microeconomics. He is also known for the Edgeworth conjecture, which states that the core of an economy shrinks to the set of competitive equilibria as the number of agents in the economy gets larger. In statistics, Edgeworth is most prominently remembered by having his name on the Edgeworth series. His most original and creative book on economics was "Mathematical Psychics: An Essay  on the Application of Mathematics to the Moral Sciences", published in 1881 at the beginning of his long career in the subject. The book was notoriously difficult to read. He frequently referenced literary sources and interspersed the writing with passages in a number of languages, including Latin, French, and Ancient Greek. The mathematics was similarly difficult, and a number of his creative applications of mathematics to economic or moral issues were judged as incomprehensible. However, one of the most influential economists of the time, Alfred Marshall, commented in his review of "Mathematical Psychics": Edgeworth's close friend, William Stanley Jevons , said of "Mathematical Psychics": The Royal Statistical Society awarded him the Guy Medal in Gold in 1907. Edgeworth served as the president of the Royal Statistical Society, 1912–14. In 1928, Arthur Lyon Bowley published a book entitled and devoted to "F. Y. Edgeworth's Contributions to Mathematical Statistics". Contributions to economics. In "Mathematical Psychics" (1881), his most famous and original book, he criticised Jevons's theory of barter exchange, showing that under a system of "recontracting" there will be, in fact, many solutions, an "indeterminacy of contract". Edgeworth's "range of final settlements" was later resurrected by Martin Shubik (1959 ) to be the game-theoretic concept of "the core". Edgeworth's conjecture. When the number of agents in an economy increases, the degree of indeterminacy is reduced. In the limit case of an infinite number of agents (perfect competition), contract becomes fully determinate and identical to the 'equilibrium' of economists. The only way of resolving this indeterminacy of contract would be to appeal to the utilitarian principle of maximising the sum of the utilities of traders over the range of final settlements. Incidentally, it was in this 1881 book that Edgeworth introduced into economics the generalised utility function, "U"("x", "y , z", ...), and drew the first 'indifference curve'. International trade. He was the first one to use offer curves and community indifference curves to illustrate its main propositions, including the "optimal tariff". Taxation paradox. Taxation of a good may actually result in a decrease in price. He set the utilitarian foundations for highly progressive taxation, arguing that the optimal distribution of taxes should be such that 'the marginal disutility incurred by each taxpayer should be the same' (Edgeworth, 1897). Monopoly pricing. In 1897, in an article on monopoly pricing, Edgeworth criticised Cournot's exact solution to the duopoly problem with quantity  adjustments as well as Bertrand's "instantly competitive" result in a duopoly model with price adjustment. At the same time, Edgeworth showed how price competition between two firms with capacity constraints and/or rising marginal cost curves resulted in indeterminacy. This gave rise to the Bertrand–Edgeworth model of oligopoly. Marginal productivity theory. Edgeworth criticised the marginal productivity theory in several articles (1904, 1911), and tried to refine the neo-classical theory of distribution on a more solid basis. Although his work in questions of war finance during World War I was original, they were a bit too theoretical and did  not achieve the practical influence he had hoped. Edgeworth's limit theorem. Edgeworth's limit theorem relates to equilibrium of supply and demand in a free market. See Edgeworth's limit theorem. Though Edgeworth's economic ideas were original and in depth, his contemporaries frequently complained of his manner of expression for lack of clarity. He was prone to verbosity and coining obscure words without providing definition for the reader.