The Problem with the Concept of Utility and its Measurement

economics can be treated as a science. The approach taken there is philosophical and does not consider in the least the sociological view of a science as highlighted by T. S. Kuhn [70] and elaborated by B. Ward . The methodology of economics took a new turn with Friedman's now famous essay on Positive Economics [40], but interest waned until very recently when methodological issues once again became prominent, as typified by Worswick [127] and Kaldor [ 64] . The approach taken in this book, which is by no means the only one, is to set down as clearly as possible the axioms from which the conclusions are derived. Alternative systems are discussed such as input-output analysis as against neoclassical_production theory .. The book is divided into five parts. Part I is concerned with methodology and Chapter 1 gives the thinking lying behind the remainder of the text. The reader may find it beneficial to give this chapter a quick initial reading and return to it when the remainder of the book has been read. Part II, on consumer theory, is composed of three chapters. The first sets out the axioms of choice under certainty for an individual. Appendices give brief comments on axiomatic approaches to choice under uncertainty and social choice respectively. We then move into ctlnsumer choice and highlight the utility as against the preference approach to consumer theory. Finally, we set out a number of results derived in the neoclassical model of consumer demand. The appendix to Chapter 4 presents the theorems of Kuhn and Tucker. Throughout we start from the least restrictive assumptions to the more specific. It is for this reason that neoclassical analysis, both in demand and in production theory, appears in the final sections. The third part is composed of the axiomatics of production, linear theories of production -Ricardian, input-output and activity analysis -and finally non-linear production theory. Part IV turns to general equilibrium with a discussion of market demand and supply, which includes a discussion of equilibrium in a modern setting and gives an intuitive introduction to the fixed point theorems. Both pure exchange and general exchange models are discussed. The final chapter of Part IV discusses the developments in welfare economics including Pareto optimality, the social welfare function, interdependent utilities, public goods, the theory of second best and fmally the core of an economy. The final part of the book gives an introduction, and no more than an introduction, to the application of dynamics to microeconomics. It discusses static and dynamic stability, tatonnement and stability for some of the models discussed earlier in the book. Inevitably a choice had to be made of what went into the book. The intention is that the material should be suitable for a postgraduate course in microeconomics. Where areas have been ignored they occasionally appear in the questions which accompany all but the first chapter. The main impetus behind the text has been a view that there has been no book that takes a book owes much to my former teachers, particularly those resident in Essex in the year 1968-9 for it was here that I found the greatest stimulus to pursue economic theory. The greatest debt of all is to Professor Morishima, whose encouragement and stimulus enabled me to understand some of the delights that economic theory can offer. My debt to the literature will be patently obvious. The present book has been in part used for a course in Mathematical Economics for third-year undergraduates at the University of Sheffield during the years 1971-4. I would like to thank those students who encouraged me to improve my exposition. In particular, I would like to thank Martin Knapp, who has read nearly the whole manuscript both as an undergraduate and now as a postgraduate. His exacting comments on nearly all chapters were most appreciated. Also a large debt is owed to Professor Nicholson, who read almost the entire manuscript in its next-to-fmal stage. Although I have not taken all his advice the final draft is much improved as a result of his scrutiny. I am also greatly indebted to friends and colleagues, in particular, R. S. Love, G.C. Reid, B. J. McCormick and F. Neal. Secretarial assistance from P. Garside, R. Miller, M. Tunnell, I. Berry and Linda Henderson at the final stage was most appreciated. Finally, I am indebted to Macmillan for their editorial job on a rather complex manumanuscript in time of rapid cost increases.

This article reviews the question of whether or not the study of values has or ought to have an important role in the study of economics. The positivist view of Robbins is criticised. Economists cannot ignore the formation of values in their assessment of welfare especially when welfare is affected by the growth and development of the economy. This is illustrated for instance by Weckstein's theory of welfare criteria and changing tastes which indicates that the variables which economists have conventionally regarded as being the determinants of an individual's welfare are not the relevant ones. Similarly the theory advanced by Scitovsky in The Joyless Economy, though different from those of Weckstein and of Marcuse, suggest that economists may not be selecting appropriate measures of welfare. Hollis and Nell, Gintis, Peacock and Rowley have also criticised the limited focus of welfare economics (Paretian welfare economics) from other points of view. The point is made that there are unresolved problems of relevance to economics concerning values·and preferences which can in principle be studied along positivist lines. There is a strong case for economists giving more consideration to these problems.

Journal of Research in Educational Sciences

This paper discusses how utility can be taught in undergraduate courses in microeconomics so that to illustrate total and marginal utility, the law of diminishing marginal utility, and consumer rationality. Diminishing marginal utility is essential in describing rational consumer behavior, overconsumption, and oversaturation to students of economics. We demonstrate a quadratic and a logarithmic total utility with the subsequent forms and shapes of marginal utility. From what it seems there is no contradiction between diminishing marginal utility in the univariate context of consuming one good and the indifference curve as the multivariate case of two goods consumed.

2012

In questa tesi, analizziamo tre problemi relativi alla Microeconomia. Gli argomenti spaziano dal marketing, alla teoria dei giochi fino alla economia dell'ambiente. Il primo capitolo presenta un nuovo modello sulla persuasione nella pubblicità. Due imprese competono in un mercato in cui decidono razionalmente le loro strategie pubblicitarie e di prezzo. Nel secondo capitolo si guarda alla competizione di imprese in un duopolio nel caso in cui i clienti abbiano razionalità limitata rispetto alla capacità di processare informazione.

Scottish Journal of Political Economy, 1990

The starting point of this paper is the discrepancy between modern choice theories which cast themselves as psychology-free and textbook choice theory (especially consumer theory) which is characterized by a high level of hedonistic influence. Three possible explanations for this discrepancy were suggested: (1) Pedagogic Reasons, (2) Friedman's Thesis and (3) Implicit psychology in choice theory itself. The third explanation is put forward as the most plausible. This is supported by a discussion of choice theories and by some recent developments in the literature. Clearly the implicit (and sometimes explicit) existence of hedonistic notions cast serious doubts on the alleged psychological neutrality of modern choice theories.

Capital & Class, 2020

Designed for one-semester use, this innovative, principles-level text takes a broad "contextual" approach to economics—including serious consideration of ecological, feminist, and social concerns—while still including coverage of the standard microeconomic concepts and models. Unlike most microeconomics textbooks, which focus exclusively on markets and efficiency, this book starts with the question of human well-being and then examines how economic activities can contribute to, or detract from, well-being. It addresses such critical concerns as ecological sustainability, distributional equality, the quality of employment, and the adequacy of living standards. It is the companion textbook to Macroeconomics in Context.

The theory of marginal utility is a microeconomic theory developed historically compared to the value-work theory. While it is considered to be in 1871 when this theory was formed as we know it, it is not true. The triumvirate Carl Menger William Stanley Jevons Leon Walras, taken as the former of the so-called "marginalist revolution" of that year, perfectly it could be replaced by appointing dubious triumvirates previous as Jules Dupuit Herman Heinrich Goosen Richard Jennings, even when the child's real father was the Swiss of Dutch origin Daniel Bernoulli, mathematician and physicist belonging to an important family of scientists and philosophers. The importance of Bernoulli and his family is essential to understand the birth and subsequent development of the theory of marginal utility (TMU from now). Below I will try, on the basis of these historical-genetic data, to expose five keys criticism about this theory, from the coordinates of the theory of the categorical ...

2020

Cette thèse est un recueil de trois articles sur la théorie microéconomique. Les deux premiers traitent de la question de la course vers le bas lorsque les gouvernements se livrent à la concurrence pour certains facteurs mobiles. Le troisième article propose une extension du problème d'appariement plusieurs-à-un en y introduisant des agents de tailles différentes. Dans le premier article, nous montrons comment le résultat standard de course vers le bas (race-to-the-bottom) peut être évité en introduisant du bien public dans un modèle de compétition fiscale. Notre économie comporte deux juridictions peuplées par de la main-d'oeuvre parfaitement mobile répartie en deux catégories : qualifiée et non-qualifiée. Les gouvernements, en poursuivant un objectif Rawlsien (max-min), annoncent simultanément leur projet d'investissement en bien public avant d'adopter une politique de taxation non-linéaire du revenu. Les travailleurs, après avoir observé la politique de taxation des différents gouvernements et leurs promesses d'investissement en bien publique, choisissent chacun un lieu de résidence et une offre de travail. Ainsi, les gouvernements atteignent leurs objectifs de redistribution en cherchant à attirer de la main-d'oeuvre productive à travers la fourniture de bien public en plus d'une politique de taxation favorable. Nous montrons qu'il existe des équilibres où les travailleurs qualifiés paient une taxe strictement positive. En outre, lorsque l'information sur le type des travailleurs est privée, il existe, pour certaines valeurs des paramètres, des équilibres où la main-d'oeuvre non-qualifiée bénéficie d'un transfert net (ou subvention) de la part du gouvernement. Dans le second article, nous étudions comment le modèle standard de compétition des prix à la Bertrand avec des produits différenciés pourrait fournir des informations