# Tag Info

### Indifference curve - Does $dU = 0$ hold in higher dimensions? / Problem of integrability

Seems to me $dU = 0$ is true by definition unless $dU$ is not defined because the function $U$ is not differentiable in some variable. E.g. $$U(x,y) = |x| + y$$ because there are a countably ...
• 26.7k

### Is it accurate to state that an economist cannot assign a true numerical value for utility?

I think the Investopedia article does not use clear terminology which leads to confusion. In Economics, utility can be split across two categories as ordinal and cardinal utility. In the case of ...
• 43.6k

### What are the units of utility?

No, you can not really say that. Here is the reason: Utility is generally used to describe preferences. Let's say my happiness is described by this utility of chocolates: $Y(X) = X$. So, two ...
• 152

### How to determine if people behave optimally with a generic utility function?

There is a whole literature on revealed preference analysis that looks at the testable implications on choice (consumption) data without imposing any functional form on the utility function. Is this ...
• 8,642

### which type of goods maximum utility function represent?

$u = \max(x, y)$ represents the preferences over two substitute goods that cannot be consumed together. For example - tea and coffee. In the event that the consumer gets x quantity of tea and y ...
• 5,267

### Is addiction a case of increasing marginal utility?

To expand on @1muflon1's answer. The theory of rational addiction assumes that the utility of a consumer at time instance $t$ depends both on current consumption of the addicitve good, say $c_t$, and ...
• 8,642

### Is it considered acceptable or unacceptable to use currency as a measure of utility?

Utility functions as ordinarily used are not a measure of well-being comparable among people, but a representation of preferences. Moreover, preferences could principally be elicited from choice ...
• 9,814

### Purpose of a monotonic transformations in utility functions

Certain calculations using utility require utility functions to have some particular properties. The point of bringing up the invariance of preferences represented by different utility functions that ...
• 121
Accepted

### Measuring "Intangible Utility" (reference request/methodological discussion)

This is just a follow-up on denesp's comment. In economics, the utility is a tool used to represent choices, and therefore the right way of measuring the individual's utility from listening to the ...
• 3,202
Accepted

### Equality of ordinal vs. cardinal utility under transformations - who made the distinction first?

It appears to be the Theory of Games and Economic Behavior (1944) by John von Neumann & Oskar Morgenstern. I have the 1953 edition which is counted as "3d", but by reading the included ...
• 31.9k

### What is the concept of ordinal utility?

Suppose Alex, Bryan, and Chris run in a race. Alex is the fastest and Chris is the slowest. So far I have only given you ordinal information about where they finished. I guess you'd be okay with me ...
• 16.6k

### Is addiction a case of increasing marginal utility?

It is possible for an addict to be rational. A famous work on this was done by Becker (1988) Theory of Rational addiction. In order for agent to have rational preferences the preferences have to ...
• 43.6k
Accepted

• 342