A systemic critique of neoclassical utility theory

Abstract

Purpose

This paper seeks to use systemic thinking for the purpose of criticizing neoclassical utility theory.

Design/methodology/approach

First, the systemic‐theoretical ontology, epistemology and methodology are presented. Then the basis for the utility theory, and later spin‐offs, the decision theory and game theory, for which among others Jon Elster is a main agent, are criticized.

Findings

The psychological hypothesis, on which the utility theory is based, is rejected as untrue.

Originality/value

The fact that a theory can be explained in simple mathematical terms may make it popular, but this will hardly make it more scientific, despite its display of numerous mathematical terms. This paper's contribution has been to provide a critique of this concept.

Citation

Johannessen, J. and Olaisen, J. (2008), "A systemic critique of neoclassical utility theory", Kybernetes, Vol. 37 No. 2, pp. 250-257. https://doi.org/10.1108/03684920810851159