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FOLLOWING A DETAILED INTRODUCTION BY THE TRANSLATOR, A PRESENTATION OF MAX WEBER'S TREATISE IS GIVEN. ECONOMIC THEORY, WITH EMPHASIS ON MARGINAL UTILITY ANALYSIS, IS NOT DEPENDENT ON PSYCHOLOGICAL THEOREMS, PRINCIPLES, OR CONCEPTS. RATHER, IT IS VIEWED AS AN ENTERPRISE DEDICATED TO WORKING OUT CONSEQUENCES OF THE ASSUMPTIONS OF ECONOMIC RATIONALITY IN ANALYTICAL TERMS, NOT IN PSYCHOLOGICAL ONES. THE CONCEPT 'OPTIMUM', CANNOT BE REGARDED AS SPECIFICALLY PSYCHOLOGICAL, PSYCHOPHYSICAL, PHYSIOLOGICAL, OR BIOLOGICAL. RATHER, IT IS PARTNER TO VARIOUS PROBLEMS WHICH DIFFER FROM ONE ANOTHER IN SIGNIFICANT WAYS. WHEN VIEWED IN THIS MANNER, IT IS CLEAR THAT THIS CONCEPT DOES NOT MARK OUT MARGINAL UTILITY THEORY. SOME HAVE USED IT AS A SPECIAL CASE TO ILLUSTRATE THE WEBER-FECHNER LAW. AS THE WEBER-FECHNER LAW PROVIDES THE THEORETICAL BASIS FOR MARGINAL UTILITY THEORY, IT CANNOT BE SEEN AS INCLUSIVE OF THE CONCEPT OF OPTIMUM. 'OPTIMUM' HAS CERTAIN ASPECTS IN COMMON WITH THE PHYSIOLOGICAL & PSYCHOLOGICAL APPROACH & MAY HAVE PEDAGOGICAL VALUE BUT CANNOT BE RESTRICTED TO THE WEBER-FECHNER LAW. B. WEISBROD.

"In the development of the mental sciences exegesis has frequently played an important part. A change of doctrine has been justified, or supported, or commended for general acceptance, by the interpretation of an authoritative text."W. J. Ashley (1895, p. 474)."We must … try to avoid an outlook narrowly constrained by the marginalist principles of 1871."Samuel Hollander (1973, p. 138).

Using actual probabilities of audit and penalty rates, the return on evasion is 91–98%. So why do not most of us evade? Existing analysis, based on expected utility theory (EUT) is unable to explain this. Furthermore, and contrary to intuition and the bulk of evidence, EUT predicts that evasion should be decreasing in the tax rate (Yitzhaki puzzle). We apply Tversky and Kahneman's [Tversky, A., Kahneman, D., 1992. Advances in prospect theory: cumulative representation of uncertainty. Journal of Risk and Uncertainty 5, 297–323] cumulative prospect theory to tax evasion. We show that prospect theory provides a much more satisfactory account of tax evasion including an explanation of the Yitzhaki puzzle. This also provides independent confirmation of prospect theory.

We examine the "progressivity" of Bruce Bueno de Mesquita's theory of conflict as originally developed inThe War Trapand as extended later. Bueno de Mesquita offers the progressivity of the expected utility theory relative to other theories and approaches to conflict as his major defense in responding to critics. Bueno de Mesquita essentially relies on Imre Lakatos' definition oftheoretical progressin presenting his argument. A review of the literature addressing the concept of theoretical progress indicates that Bueno de Mesquita's application of Lakatosian criteria is incomplete and that Lakatos' criteria are themselves flawed. We review the philosophy of science literature dealing with theoretical progress or rational criteria for theory choice and evaluate the progressivity of the expected utility theory of conflict in light of criteria other than Lakatos'. While we do recommend further elaboration of Bueno de Mesquita's theory, we do not find it more progressive than its rivals.

ABSTRACTMultiattribute utility theory (MAUT) was employed to model the professional judgments of external auditors. Fully developed MAUT models elicited from each subject according to keeney and Raiffa's [6] procedures were used to predict the internal control systems evaluations made by auditor‐subjects. Correlation analyses were used to compare the predictive ability of the "correct" MAUT models to the accuracy of models developed under simplifications of the MAUT procedures. One simplified model resulted from relaxing the requirements for attribute independence that determine the functional forms. A second modified MAUT function was formed using unitary weightings on conditional utility functions instead of elicited scaling constants. Tests showed essentially no significant differences in predictive accuracy among the models in the contact of this study.

In recent years, there has been a growing awareness that most decision makers are not only concerned with the financial implications of information technology/system (IT/IS) projects, but they are also concerned with other objectives such as competitive advantage, market share and future growth. Nowadays, multi‐criteria decision‐making methods are gaining importance due to their inherent ability to judge different alternative scenarios for possible selection of the best alternative. This paper provides a decision‐making framework for senior executives when selecting innovative IT/IS projects. The proposed framework is based on the multi‐criteria utility theory (MCUT) combined with information economics principles to select IT/IS project(s) based on "business value" and "risk" criteria. MCUT has the advantage of taking into consideration the decision maker's preferences in the form of utility functions defined over a set of tangible and intangible criteria. To illustrate the application of the proposed framework, a hypothetical case study is provided, where input elicited from four engineering professionals is used to develop utility functions for a predefined set of selection criteria.

Recent studies indicate that absence of the consideration of risk attitudes of decisionmakers in the risk matrix establishment process has become a major limitation. In order to evaluate risk in a more comprehensive manner, an approach to establish risk matrices that integrates risk attitudes based on utility theory is proposed. There are three main steps within this approach: (1) describing risk attitudes of decisionmakers by utility functions, (2) bridging the gap between utility functions and the risk matrix by utility indifference curves, and (3) discretizing utility indifference curves. A complete risk matrix establishment process based on practical investigations is introduced. This process utilizes decisionmakers' answers to questionnaires to formulate required boundary values for risk matrix establishment and utility functions that effectively quantify their respective risk attitudes.

In chapter 5 of his book More Heat Than Light (1989), Philip Mirowski mentions that the first neoclassical (W. S. Jevons, Leon Walras, Vilfredo Pareto, and Irving Fisher, but with the notable exception of Carl Menger) all referred to the analogy between their formulations and those of the physics of their day. Then he asserts, going beyond their statements on this matter, that the early neoclassical model was purely an analogical transposition of the model of the field theory of physics of the 1860s, which he calls "protoenergetics." The latter implies a subject matter that is a mechanics of equilibrium and of reversible phenomena, and in which there is no question of the appearance of the notion of entropy.