However, additivity is applicable only to cardinal utility functions, while weak additivity is applicable to ordinal utility functions.
12.
These developments were accompanied by the introduction of new tools, such as indifference curves and the theory of ordinal utility.
13.
In case of ordinal utility, it is impossible to determine what choices were made when someone purchases, for example, an orange.
14.
For each T > 1, X _ T is preferentially-independent ( see Debreu theorems # Additivity of ordinal utility function for a definition ).
15.
In 1944, Austrian economist Oskar Morgenstern presented a rigorous schematization of an ordinal utility function ( the Von Neumann Morgenstern utility theorem ) in Theory of Games and Economic Behavior.
16.
Cardinal utility allows the relative magnitude of utilities to be discussed, while ordinal utility only implies that goods can be compared and ranked according to which good provided the most utility.
17.
The idea of cardinal utility is considered outdated except for specific contexts such as consumer theory, ordinal utility with its weaker assumptions is preferred because results that are just as strong can be derived.
18.
The book " built " on ordinal utility and mainstreamed the now-standard distinction between the substitution effect and the income effect for an individual in demand theory in the 2-good case.
19.
In the 20th century, neoclassical theorists moved away from an earlier notion suggesting that total utility for a society could be measured in favour of ordinal utility, which hypothesizes merely behaviour-based relations across persons.
20.
Pareto's main contribution to ordinal utility was to assume that higher indifference curves have greater utility, but how much greater does not need to be specified to obtain the result of increasing marginal rates of substitution.
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