This work resurrects a long-forgotten method for eliciting human preferences based on the stimuli-response procedure. The so-called Psycho-Physics school (Weber-Fechner, 1860) [1] attempted to mathematically explain the procedure above. A new theory, Elementary Catastrophe Theory (E.C.T.) [2, which unfolded a unique Potential in human brain fifty years ago, offered the underlying dynamics needed to fulfil all the desiderata at the time. This axiomatization of a self-measurement process gives empirical data a reason that is free of any "a priori" assumptions about human aim. This 5th degree symmetric polynomial exhibits a characteristic (Negative Schwarz' Derivative) [3] that goes a long way to solving controversies and removing roadblocks in the progress of Portfolio Theory [4]. It also fits the major landmark criteria in the fields of Value and Utility, such as the Arrow Impossibility result. We reprint a long-overdue addition to Pratt's [5] in the Annex. Finally, Free Energy could displace Entropy as a paradigm in this field [7] with this newly discovered Human Scale (Cardinal) [6, which is based simply on the postulate of Non-Satiation.
Author(S) Details
William M. Saade
Formerly with the Stanford Research Institute at the Decision Analysis Group 333, Ravenswood Ave, Menlo Park, CA 94025, USA.
View Book:- https://stm.bookpi.org/RAMRCS-V7/article/view/5493
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