Transforming Ordinal Riskless Utility into Cardinal Risky Utility: A Comment on Chung, Glimcher, & Tymula (2019)

Chung, Glimcher, & Tymula (2019, this journal) observed both consumers’ choices over commodity bundles and choices under risk. They assumed a cardinal riskless utility function representing consumer choices, and a cardinal risky utility function . The two were inconsistent. This note shows that the two functions can be reconciled if we assume that is ordinal. Then one utility function can accommodate both risky and riskless choices.