Showing papers by "Jacob Marschak published in 1950"
TL;DR: In this paper, it is shown that if the economists' theory of assets is completed by a fourth postulate on rational choice, then utility can be defined as a quantity whose mathematical expectation is maximized by the rational man.
Abstract: After introducing some basic concepts and three postulates on rational choice, it is proposed to show that if the economists’ theory of assets is completed by a fourth postulate on rational choice, then utility can be defined as a quantity whose mathematical expectation is maximized by the rational man. In this sense, utility is ‘measurable’ and ‘manageable’. These results are inspired by von Neumann’s and Morgenstern’s discussion of utility in Theory of Games and Economic Behavior; an attempt is made to sketch some relations between their approach and the present one, It is shown in conclusion that while gambling is compatible with the four postulates, the ‘love of danger’ is not: and a property of the maximum mathematical expectation of utility is conjectured.
461 citations
TL;DR: In this paper, each individual maximizes a utility function that depends only on the amounts of various goods he will consume during a period that begins after the marketing date and during which no further exchanges takes place.
Abstract: Consider the following propositions: (1) Each individual maximizes a utility function that depends only on the amounts of various goods he will consume during a period that begins after the marketing date and during which no further exchanges takes place; (2) The numeraire (i.e., the thing whose price is fixed at unity) is neither a consumption nor a production good; (3) At least one individual has positive money stock. Condition (1) defines a ‘static’ or ‘uniperiod’ model; (2) defines paper money; (3) excludes the regimes of ‘money-of-account’.
39 citations