Thank you Toby. The ‘preference over gambles’ as a way of measuring diminishing marginal utility will depend strongly on the expected utility maximization assumption; in practice, it could be vulnerable to reference-point effects I believe. (Also the logarithmic utility function is obviously an imposed parametric assumption, but a good start.)
Still, these approaches seem reasonable, especially insofar as broadly similar results come from varying contexts.
Thank you Toby. The ‘preference over gambles’ as a way of measuring diminishing marginal utility will depend strongly on the expected utility maximization assumption; in practice, it could be vulnerable to reference-point effects I believe. (Also the logarithmic utility function is obviously an imposed parametric assumption, but a good start.)
Still, these approaches seem reasonable, especially insofar as broadly similar results come from varying contexts.