Abstract
Review of Ivan Moscati’s Measuring Utility: From the Marginal Revolution to Behavioral Economics. New York, NY: Oxford University Press, 2019, 326 pp.
Highlights
Before we address the book, it is useful to recall some basic concepts from the foundations of contemporary microeconomic theory
There were no relevant differences between economists during the Ordinal Revolution and their predecessors—with one exception: the former abandoned the idea that the possibility of measuring utility is a necessary condition for performing economic analysis, as Walras believed
As Moscati makes clear in the third part of the book (208–211), all economists who were working on the topic at that time (Friedman, Savage, Ellsberg, and others) converged on what measuring utility means
Summary
Adam Smith and David Ricardo maintained that the exchange value of a good depends on the quantity of labor necessary to produce it. Later, during the so-called ‘Marginal Revolution’ in economics, it was argued that the exchange value of a good depends on the marginal utility enjoyed by an individual in the economy. This latter idea subsequently became the cornerstone of most microeconomic and, more recently, macroeconomic analyses. MEASURING UTILITY / BOOK REVIEW dichotomy between cardinal and ordinal utility It analyses the interplay between the history of scientific measurement in general and that in economics, psychology and other disciplines in order to provide a better framework for understanding the development of utility measurement. It presents a thorough discussion of the epistemological problems inherent to utility measurement
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