Ordinal Or Cardinal Utility: A Note
Modern microeconomic theory is based on a foundation of ordinal preference relations. Good textbooks stress that cardinal utility functions are artificial constructions of convenience, and that economics does not attribute any meaning to “utils.” However, we argue that despite this official position...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Sciendo
2014-02-01
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| Series: | Studia Humana |
| Subjects: | |
| Online Access: | https://doi.org/10.2478/sh-2014-0003 |
| Summary: | Modern microeconomic theory is based on a foundation of ordinal preference relations. Good textbooks stress that cardinal utility functions are artificial constructions of convenience, and that economics does not attribute any meaning to “utils.” However, we argue that despite this official position, in practice mainstream economists rely on techniques that assume the validity of cardinal utility. Doing so has turned mainstream economic theorizing into an exercise of reductionism of objects down to the preferences of ‘ideal type’ subjects. |
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| ISSN: | 2299-0518 |