P. A. Jensen

P. A. Jensen was a Danish economist renowned for his work on decision theory and the evaluation of uncertain prospects, particularly in gambling and insurance contexts. His influential 1968 paper introduced what is now known as Jensen's Inequality, a mathematical principle showing that the expected value of a convex (curved outward) function of a random variable is at least the function evaluated at the expected value of that variable. This concept helps in understanding risk and variability in economic and financial models, highlighting how non-linear transformations of uncertain outcomes influence overall expectations.