Von Neumann-Morgenstern Utilities, Risk Taking, and Welfare

John C. Harsanyi

Chapter 17 in Arrow and the Ascent of Modern Economic Theory, 1987, pp 545-558 from Palgrave Macmillan

Abstract: Abstract Von Neumann and Morgenstern (1953, p. 28) have made it very clear that their utility theory disregards the utility (or the disutility) of the act of gambling itself. It seems to me that the utility functions defined by their theory have often been misinterpreted by paying insufficient attention to this fact. The purpose of this paper is to suggest a more adequate interpretation of von Neumann-Morgenstern (vNM) utility functions.

Keywords: Utility Function; Marginal Utility; Lottery Ticket; Process Utility; Outcome Utility (search for similar items in EconPapers)
Date: 1987
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DOI: 10.1007/978-1-349-07239-2_17

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