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Psychophysical Foundations of the Cobb-Douglas Utility Function

Author

Listed:
  • Rossella Argenziano

    (Department of Economics - University of Essex)

  • Itzhak Gilboa

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

Abstract

Relying on a literal interpretation of Weber's law in psychophysics, we show that a simple condition of independence across good categories implies the Cobb-Douglas preferences.

Suggested Citation

  • Rossella Argenziano & Itzhak Gilboa, 2018. "Psychophysical Foundations of the Cobb-Douglas Utility Function," Working Papers hal-01933881, HAL.
    • Handle: RePEc:hal:wpaper:hal-01933881
    DOI: 10.2139/ssrn.3178753
    as

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    References listed on IDEAS

    as
    1. Avraham Beja & Itzhak Gilboa, 1989. "Numerical Representations of Imperfectly Ordered Preferences (A Unified Geometric Exposition," Discussion Papers 836, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Trockel, Walter, 1989. "Classification of budget-invariant monotonic preferences," Economics Letters, Elsevier, vol. 30(1), pages 7-10.
    3. José Faro, 2013. "Cobb-Douglas preferences under uncertainty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(2), pages 273-285, October.
    4. Rossella Argenziano & Itzhak Gilboa, 2017. "Foundations of Weighted Utilitarianism," Working Papers hal-01933882, HAL.
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    Cited by:

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    3. Dziewulski, Paweł, 2020. "Just-noticeable difference as a behavioural foundation of the critical cost-efficiency index," Journal of Economic Theory, Elsevier, vol. 188(C).
    4. Duffy, Sean & Smith, John, 2020. "An economist and a psychologist form a line: What can imperfect perception of length tell us about stochastic choice?," MPRA Paper 99417, University Library of Munich, Germany.
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    6. Duffy, Sean & Gussman, Steven & Smith, John, 2019. "Judgments of length in the economics laboratory: Are there brains in choice?," MPRA Paper 93126, University Library of Munich, Germany.

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    More about this item

    Keywords

    Cobb-Douglas; Weber's Law; Semi-Order;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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