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An Axiomatization of Utility Based on the Notion of Utility Differences

Author

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  • Patrick Suppes

    (Stanford University, Stanford, California)

  • Muriel Winet

    (Stanford University, Stanford, California)

Abstract

In the literature of economics the notion of utility differences has been much discussed in connection with the theory of measurement of utility. However, to the best of our knowledge, no adequate axiomatization for this difference notion has yet been given at a level of generality and precision comparable to the von Neumann and Morgenstern construction of a probabilistic scheme for measuring utility. (The early study of Wiener is not axiomatically oriented.) The purpose of this paper is to present an axiomatization of this notion and to establish the expected representation theorem guaranteeing measurement unique up to a linear transformation.

Suggested Citation

  • Patrick Suppes & Muriel Winet, 1955. "An Axiomatization of Utility Based on the Notion of Utility Differences," Management Science, INFORMS, vol. 1(3-4), pages 259-270, 04-07.
    • Handle: RePEc:inm:ormnsc:v:1:y:1955:i:3-4:p:259-270
    DOI: 10.1287/mnsc.1.3-4.259
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    Cited by:

    1. Minardi, Stefania & Savochkin, Andrei, 2015. "Preferences with grades of indecisiveness," Journal of Economic Theory, Elsevier, vol. 155(C), pages 300-331.
    2. S. Cerreia-Vioglio & F. Maccheroni & M. Marinacci & A. Rustichini, 2017. "Multinomial logit processes and preference discovery: inside and outside the black box," Working Papers 615, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    3. Herweg, Fabian & Müller, Daniel, 2021. "A comparison of regret theory and salience theory for decisions under risk," Journal of Economic Theory, Elsevier, vol. 193(C).
    4. Gerard Debreu, 1957. "Stochastic Choice and Cardinal Utility," Cowles Foundation Discussion Papers 39, Cowles Foundation for Research in Economics, Yale University.
    5. Tserenjigmid, Gerelt, 2019. "Choosing with the worst in mind: A reference-dependent model," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 631-652.
    6. Jean Baccelli & Philippe Mongin, 2016. "Choice-based cardinal utility: a tribute to Patrick Suppes," Journal of Economic Methodology, Taylor & Francis Journals, vol. 23(3), pages 268-288, July.
    7. Georgios Gerasimou, 2019. "Simple Preference Intensity Comparisons," Discussion Paper Series, School of Economics and Finance 201905, School of Economics and Finance, University of St Andrews, revised 27 Apr 2020.
    8. Gianmarco Caldini, 2022. "On the notion of measurable utility on a connected and separable topological space: an order isomorphism theorem," Papers 2301.01271, arXiv.org.
    9. Marcus Pivato, 2015. "Social choice with approximate interpersonal comparison of welfare gains," Theory and Decision, Springer, vol. 79(2), pages 181-216, September.
    10. Jean-Sébastien Lenfant, 2018. "Probabilising the consumer: Georgescu-Roegen, Marschak and Quandt on the modelling of the consumer in the 1950s," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 25(1), pages 36-72, January.
    11. Pivato, Marcus, 2013. "Multiutility representations for incomplete difference preorders," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 196-220.
    12. Roberts, Blaine, 1969. "An extension of utility theory," ISU General Staff Papers 196901010800004596, Iowa State University, Department of Economics.
    13. Herweg, Fabian & Weinschenk, Philipp, 2022. "Multi-attribute heuristics and intertemporal choices," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 174-181.
    14. M. Kaneko, 1984. "On interpersonal utility comparisons," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 1(3), pages 165-175, October.
    15. Tserenjigmid, Gerelt, 2015. "Theory of decisions by intra-dimensional comparisons," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 326-338.
    16. Georgios Gerasimou, 2017. "Preference intensity representation and revelation," Discussion Paper Series, School of Economics and Finance 201716, School of Economics and Finance, University of St Andrews, revised 01 Jun 2019.
    17. Simone Cerreia-Vioglio & Fabio Maccheroni & Massimo Marinacci, 2020. "Multinomial logit processes and preference discovery: outside and inside the black box," Working Papers 663, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    18. Simone Cerreia-Vioglio & Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2023. "Multinomial Logit Processes and Preference Discovery: Inside and Outside the Black Box," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(3), pages 1155-1194.

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