Cardinal utility in welfare economics and in the theory of risk-taking

Abstract

The article analyzes why the concept of cardinal utility is not used in most branches of economics, except in welfare economics and the theory of risk-taking. The author argues that the concept of cardinal utility in both areas is based on the same principle and that the differences in the quantitative properties of the cardinal utility function can be explained by different pertinent conditions in both areas, such as the gamblers’ irrationality and the unequal chances in the social game. – AI-generated abstract.