Batley, R. (2007) On ordinal utility, cardinal utility, and random utility. Theory and Decision, Online. ISSN 1573-7187Full text available as:
Available under licence : See the attached licence file.
Though the Random Utility Model (RUM) was conceived entirely in terms of ordinal utility, the apparatus throughwhich it is widely practised exhibits properties of cardinal utility. The adoption of cardinal utility as a working operation of ordinal is perfectly valid, provided interpretations drawn from that operation remain faithful to ordinal utility. The paper considers whether the latterrequirement holds true for several measurements commonly derived from RUM. In particular it is found that measurements of consumer surplus change may depart from ordinal utility, and exploit the cardinality inherent in the practical apparatus.
|Copyright, Publisher and Additional Information:||© 2007 Springer. This is an author produced version of a paper published in Theory and Decision. Uploaded in accordance with the publisher's self-archiving policy.|
|Keywords:||ordinal utility, cardinal utility, Random Utility Model, log sum, rule‐of‐a‐half|
|Institution:||The University of Leeds|
|Academic Units:||The University of Leeds > Faculty of Environment (Leeds) > Institute for Transport Studies (Leeds)|
|Depositing User:||Adrian May|
|Date Deposited:||03 Aug 2007|
|Last Modified:||27 Jun 2014 04:00|