Transforming Ordinal Riskless Utility into Cardinal Risky Utility: A Comment on Chung, Glimcher, and Tymula (2019)

• 成果类型: Editorial Material
• 署名作者: Wakker, Peter P.
• 署名单位: Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20190338
• 发表日期: 2022
• 页码: 561-565
• 关键词: PROSPECT-THEORY; REPRESENTATION

摘要

Chung, Glimcher, and Tymula (2019) observed both consumers' choices over commodity bundles and choices under risk. They assumed a cardinal riskless utility function V representing consumer choices and a cardinal risky utility function U. The two were inconsistent. This note shows that the two functions can be reconciled if we assume that V is ordinal. Then one utility function U can accommodate both risky and riskless choices.