The theory of ophelimity in closed and open cycles proposed by Pareto following Volterra's observations is examined. Although these were oriented towards identification of the integrability conditions, Pareto shows no interest in them, but in the problem of the measurement of the elementary ophelimities (i.e. of the marginal utilities) starting from the empirical data (of an ideal experiment) represented by the marginal rates of substitution and by the indifference varieties. Pareto examines both the case in which the integrability conditions are satisfied (colsed cycle) and that in which they are not satisfied (open cycle) and introduces in both cases some identification conditions for the elementary ophelimities (i.e. conditions sufficient for their measurability starting from the empirical data). These conditions are commented upon and generalised.
The Paretian Theory of Ophelimity in Closed and Open Cycles
MONTESANO, ALDO MARIA
2006
Abstract
The theory of ophelimity in closed and open cycles proposed by Pareto following Volterra's observations is examined. Although these were oriented towards identification of the integrability conditions, Pareto shows no interest in them, but in the problem of the measurement of the elementary ophelimities (i.e. of the marginal utilities) starting from the empirical data (of an ideal experiment) represented by the marginal rates of substitution and by the indifference varieties. Pareto examines both the case in which the integrability conditions are satisfied (colsed cycle) and that in which they are not satisfied (open cycle) and introduces in both cases some identification conditions for the elementary ophelimities (i.e. conditions sufficient for their measurability starting from the empirical data). These conditions are commented upon and generalised.
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