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Wakker, \PeterP.\ (2022). Transforming Ordinal Riskless Utility into Cardinal Risky Utility: A Comment on Chung, Glimcher, and Tymula (2019) American Economic Journal: Microeconomics, 14(2):561--565.

  • Journal
    American Economic Journal: Microeconomics
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Chung, Glimcher, and Tymula (2019) observed both consumers{\textquoteright} choices over commodity bundles and choices under risk. They assumed a cardinal riskless utility function V representing consumer choices and a cardinal risky utility function U. The two were inconsistent. This note shows that the two functions can be reconciled if we assume that V is ordinal. Then one utility function U can accommodate both risky and riskless choices