Cardinal utility

In economics, a cardinal utility expresses not only which of two outcomes is preferred, but also the intensity of preferences, i.e. how much better or worse one outcome is compared to another.^[1]

In consumer choice theory, economists originally attempted to replace cardinal utility with the apparently-weaker concept of ordinal utility. Cardinal utility appears to impose the assumption that levels of absolute satisfaction exist, so magnitudes of increments to satisfaction can be compared across different situations. However, economists in the 1940s proved that under mild conditions, ordinal utilities imply cardinal utilities. This result is now known as the von Neumann-Morgenstern utility theorem; many similar utility representation theorems exist in other contexts.