Within the expected-utility framework, the only explanation for risk aversion is that the utility function for wealth is concave: A person has lower marginal utility for additional wealth when she is wealthy than when she is poor. This paper provides a theorem showing that expected-utility theory is an utterly implausible explanation for appreciable risk aversion over modest stakes: Within expe...

The marginal social value of income redistribution is understood to depend on both the concavity of individuals’ utility functions and the concavity of the social welfare function. In the pertinent literatures, notably on optimal income taxation and on normative inequality measurement, it seems to be accepted that the role of these two sources of concavity is symmetric with regard to the social...

Marginal energy intensity (MEI) rigorously disaggregates consumption across a complex water supply system to the resolution of individual consumers. MEI is robust metric for optimizing utility management and retrofit strategies.

By taking sets of utility functions as a primitive description of agents, we define an ordering over assumptions on utility functions that gauges their implicit measurement requirements. Cardinal and ordinal assumptions constitute two types of measurement requirements, but several standard assumptions in economics lie between these extremes. We first apply the ordering to different theories for...

This short article offers economically intuitive proofs of the Euler equation and the maximum principle based on one of the best known results in economics, namely that the marginal utility of one extra dollar spent on each consumption goods is the same for all the consumption goods as required by budget-constrained utility maximization.

User fees for municipal services may generate revenue for municipalities and their utility commissions, but they are equally important as prices for those services. Pricing services at marginal cost can lead to efficient production and consumption of the service, and efficient allocation of the service when capacity limits are reached; and it can help to guide investment on an efficient basis. ...