The Modern Theory of Consumer Behavior: Ordinal or Cardinal?

The Quarterly Journal of Austrian Economics

Tags: Subjectivism, Value and Exchange

07/30/2014 Quarterly Journal of Austrian Economics William Barnett II

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Volume 6, No. 1 (Spring 2003)

Neoclassical utility functions are an invalid means of analyzing consumer behavior for three reasons: first, and most important, because such functions, and their attendant rankings, are cardinal, not ordinal in nature; second, because, with respect to the set of bundles relevant to actual human beings, such functions are not continuous and, therefore, not differentiable; and third, because such functions do not correctly, consistently, and properly include dimensions/units.

CITE THIS ARTICLE

Barnett, William II. “The Modern Theory of Consumer Behavior: Ordinal or Cardinal?” The Quarterly Journal of Austrian Economics Quarterly 6, No. 1 (Spring 2003): 41-65.

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