Psychophysical interpretation for utility measures

Arbeitspapier

The paper explores utility measures by combining experiments with mathematical derivations in psychophysics paradigm. The analysis on ultimatum game experiment reveals an evidence for utility threshold and thus supports Bernoulli's utility logarithmic law. Both experimental results and theoretical derivations show that the logarithmic law is suitable for the description of commodity choice and the power law for risk choice. The further mathematical demonstration indicates the logarithmic law for utility scaling to be a Klein-Rubin utility function, a utility function well defined in microeconomics. Based on this, the experimental utility measure is connected with the econometric model Linear Expenditure System, and presents an experimental procedure for testing the utility maximization hypothesis, which will remove a long unsettled perplexity in a fundamental stone of economics since Gossen proposed it in 1854.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Economics Discussion Papers ; No. 2011-50

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Relation of Economics to Other Disciplines ; Microeconomic Behavior: Underlying Principles
• Thema: Psychophysics ; ultimatum game ; utility function ; logarithmic law ; power law

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): He, Yuqing
• Ereignis: Veröffentlichung
• (wer): Kiel Institute for the World Economy (IfW)
• (wo): Kiel
• (wann): 2011

Weitere Informationen

• Handle: http://hdl.handle.net/10419/52680
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ