Abstract
The analysis of choice in situations involving uncertainty has always occupied an important place in economic research. This is especially true of the period following the publication of J. von Neumann's and Morgenstern's monumental treatise on game theory. In this work, the writers not only developed a systematic theory of rational behavior, but also introduced a cardinal utility theory of risk preference into modern economic literature. Subsequently there ensued an extended controversy over the relative merits of ordinal and cardinal theories of utility. Although a consensus has not yet been attained, it seems that professional opinion has reached a point of stability. Most economists now agree that an ordinal preference theory is sufficient for the prediction of riskless choices. On the other hand, many hold that in the study of choices involving risks (stochastic situations), a cardinal measure of utility is more serviceable.
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