Ethics and economics in Karl Menger

Abstract

Menger disagreed with this view for various reasons. Also, the subjective expectation is infinite. There are many cases where man's behaviour fails to conform to mathematical expectations: games in which a player can win only one very large amount with a very small probability or games offering a single moderate amount with a very high probability. Furthermore, we can always find a sequence of payoffs x1, x2, x3,…, which yield infinite expected value, and then propose, say, that u(xn)=2ⁿ, so that expected utility is also infinite. Menger therefore proposed that utility must also be bounded above for paradoxes of this type to be resolved.

Citation

Becchio, G. (2009), "Ethics and economics in Karl Menger", Becchio, G. (Ed.) Unexplored Dimensions: Karl Mengeron Economics and Philosophy (1923–1938) (Advances in Austrian Economics, Vol. 12), Emerald Group Publishing Limited, Leeds, pp. 21-35. https://doi.org/10.1108/S1529-2134(2009)0000012004