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The Aftermath of Abraham De Moivre's Doctrine of Chances and Annuities on Lives in 18Th-Century Europe

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The Aftermath of Abraham De Moivre's Doctrine of Chances and Annuities on Lives in 18Th-Century Europe Capítulo 14 The aftermath of Abraham de Moivre's Doctrine of Chances and Annuities on Lives in 18th-century Europe Ivo S c h n e id e r Miinchner Zertrum fur Wissenschafts-und T echnikgeschichte Deutches Museum Some biographical data of De Moivre' Abraham Moivre was bom in May 26, 1667 as the son of a Protestant surgeon in Vitry-le- François in the Champagne. He spent the first 20 years of his life in France where he was educated in different Huguenot institutions until they were closed in the early 1680s. Quite early he had turned to mathematics. At 16 he had studied amongst other things Huygens' tract "De ratiociniis in ludo aleae". In Paris in the 1680s he was taught by the private teacher of mathematics Jacques Ozanam, who might have offered to Moivre a model for how to make his living when he had to support himself shortly afterwards. After the revocation of the Edict of Nantes in 1685 hundreds of thousands of Huguenots left France. Amongst them was Moivre who went to England together with his brother Daniel in December 1687. In England he began his occupation as a tutor in mathematics. Here he added a "de" to his name. De Moivre mastered Newton's Principia from 1687 very early and became a true and loyal Newtonian. In 1692 he met Halley and Newton and in 1697 he was chosen a Fellow of the Royal Society. He was naturalized in 1705, and, when Newton had nominated him a member of the commission to decide the priority dispute between himself and Leibniz in favour of Newton in 1712, he gave up every hope of finding a position as a university professor for mathematics on the continent. But even in England he had to learn that for him the only way to make a living was to work as a private teacher and as a consultant for problems concerning different forms of annuities. In order to attract well-to-do clients he had to make a reputation as a mathematician. He soon found out that it was much easier to do that in the calculus of games of chance than in the new field of the infinitesimal calculus. Francis Robartes, one of de Moivre's clients, draw de Moivre's attention to the first edition of 231 H istoria de la Probabilidad y la Estadística (IV) Montmort's Essay d’analyse sur les jeux de hazard from 1708, which raised de Moivre's interest in the theory of games of chance and probability. In the Philosophical Transactions for 1711 de Moivre published a longer article De mensura sortis, seu, De Probabilitate Eventuum in Ludis a Casu Fortuito Pendentibus on the subject, which was followed by his Doctrine of Chances, the first edition of which was published in 1718. A second edition from 1738 contained de Moivre's normal approximation to the binomial distribution, which he had found in 1733. The third edition from 1756 contained as a second part the Annuities on Lives, which had been published as a monograph for the first time in 1725. The Doctrine of Chances is in part the result of a competition between de Moivre on the one hand and Montmort together with Niklaus Bernoulli on the other. De Moivre claimed - very much to the annoyance of Montmort, but justified by his later work - that his representation of the solutions of the then current problems tended to be more general than those of Montmort. This holds at least for the second and third edition of the Doctrine of Chances, which offered so many new results that Montmort’s contributions to the subject fell justly into oblivion. Precursors of de Moivre Christiaan Huygens with his tract De ratiociniis in ludo aleae'1 of 1657 was the first author who acquainted de Moivre with the calculus of games of chance. In England de Moivre read a small booklet Of the Laws of Chance, or, a Method of Calculation of the Hazards of Game, published anonymously by John Arbuthnot in 1692, which was largely inspired by Huygens' tract. When in 1708 the Essai d'Analyse sur le Jeux de Hasard of the French nobleman Pierre Rémond de Montmort appeared anonymously, de Moivre hurried to read this work written in his native tongue. Edmond Halley’s "An Estimate of the Degrees of the Mortality of Mankind", published in the Philosophical Transactions for 1693'“, might have become known to de Moivre quite early, since he had met Halley in 1692 in person. When de Moivre wrote De Mensura Sortis", his first tract concerning games of chance and probability, he had no knowledge of Jakob Bernoulli's Ars Conjectandi, which was published in 1713, eight years after Bernoulli's death. In the preface of the Ars Conjectandi Nikolaus Bernoulli, Jakob Bernoulli's nephew, had asked de Montmort and de Moivre to continue his uncle’s work, the application of the calculus of probabilities "to economical and political uses". Shortly after the Ars Conjectandi the second edition of Montmort's Essai of 1714 appeared, which contained, apart from some improvements, an extension of the first edition and the correspondence between Montmort and Nikolaus Bernoulli up to the end of 1713. The long preface for the first edition of the Doctrine of Chances of 1718 shows that de Moivre understood the second edition of the Essai as a challenge to replace the solutions offered by Montmort and Nikolaus Bernoulli by his own. This is one reason why he showed no interest in continuing Jakob Bernoulli's project of applying the theory of probability to economics and politics as outlined in the Ars conjectandi. Surprisingly, de Moivre seems to have been unfamiliar with the correspondence between Pascal and Fermat from 1654 concerning games of chance, part of which was published still in the 17th centuryv, and with Blaise Pascal's Traité du triangle arithmétique published in 1665. In constrast to Huygens, Pascal and Fermat used combinatorial methods for the solution of the problems discussed by them. But even Jakob Bernoulli, who had devoted the second part of the Ars Conjectandi to combinatorics, was obviously totally ignorant of Pascal's 232 H istoria de la P robabilidad y la Estadística (IV) contributions to combinatorics. De Moivre's main contributions to stochastics De Moivre's main contributions to stochastics are contained first of all in his The Doctrine of Chances: Or, A Method for Calculating the Probability of Events in Play, with editions in 1718, 1738, and 1756 and in his Annuities on Lives, which appeared first in 1725; later editions came out in 1731, 1743, 1750, 1752 and together with the Doctrine of Chances in 1756. The Miscellanea analytica of 1730 dealt inter alia with open issues in the controversy with Montmort who, however, had died already in 1719. In a supplement to the Miscellanea analytica de Moivre had started, in competition with James Stirling, to find an approximation for n-factorial when n is large. This led in 1733 to the first formulation of the central limit theorem in the Approximatio ad Summam Terminorum Binomii (a+b)n in Seriem expansi which de Moivre declared as a private communication for some friends as distinct from a publication. The publication of this result occurred only in the second and third edition of the Doctrine of chances'4. The main achievements contained in the Doctrine are a first theory of probability in the introduction™, which contains the principal concepts like probability, conditional probability, expectation, dependent and independent events, the multiplication rule, and the binomial distribution. De Moivre had also developed algebraical and analytical tools for the theory of probability for instance a "new algebra" for the solution of the problem of coincidences, which forshadowed Boolean algebra™1, the theory of recurrent series for the solution of difference equations, and the method of generating functions. He used the method of generating functions, for example, for solving the general dicing problem of finding the number of chances to get s points with a throw of n dice each having f faceslx. De Moivre determines the number by taking the coefficient of xs in the development of ( j _ Y i * • V i=l He had developed for the solution of the problem of the duration of play the theory of what he called recurrent series, which are in modem terminology homogeneous linear difference equations with constant coefficients. De Moivre's greatest mathematical achievement is considered a form of the central limit theorem, which he found in 1733 at the age of 66. He understood his central limit theorem as a generalization and a sharpening of Bernoulli's main theorem in the fourth part of the Ars Conjectandi, which was later named the law of large numbers by Poissonx. Starting from Bernoulli's law of large numbers in the form \>P(\rn-p\<e)>j-^ where rn is the relative frequency of the occurrence of independent events E¡, i = l,...,n with P(E¡) = p, s arbitrarily small and c arbitralily large quantities in a sufficiently large number n 233 H istoria de la P robabilidad y la Estadística (IV) of trials, de Moivre found on the basis of an approximation of log n! for large n and of Bernoulli's formula for the sum of powers of integers the equivalent of 2p(\-p) 2 limP r „ ~ p \ ^ c . fe'dt. n—ko JO De Moivre calculated the numerical values 0.682.., 0.954.. and 0.998..of this integral for c = 1,2, and 3. He concluded from this result that "altho1 Chance produces Irregularities" those irregularities shall cancel out with time in order to reveal the "Order which naturally results from Original Design" and so the existence of God, "the great Maker and Govemour of all"’11.
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