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On ordinal utility, cardinal utility, and random utility  

Batley, R. (2007) On ordinal utility, cardinal utility, and random utility. Theory and Decision, Online. ISSN 1573-7187

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Abstract

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.  

Item Type: Article
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 
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: 08 Feb 2013 17:04
Published Version: http://www.springerlink.com/content/n6r6n74462g634...
Status: Published
Publisher: Springer Verlag
Refereed: Yes
Identification Number: 10.1007/s11238-007-9046-2
Related URLs:
URI: http://eprints.whiterose.ac.uk/id/eprint/2544

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