| Sumario: | The article presents information on the use of unbound utility functions in expected-utility maximization. The purpose of this article is to examine the practical limitations on the use of unbounded utility functions. The conclusion is reached that only under highly improbable conditions concerning the probability density function of returns do unbounded utility functions fail to discriminate correctly between alternative actions. The aim of this note is to establish that the objections to the use of unbounded utility functions are not, in practice, very restrictive. For one important class of function, namely the polynomials, the author require no more than that the relevant finite moments exist, as, in the majority of cases, they do. Even in the more general case, the conditions necessary to permit the use of unbounded utility functions will generally be met in practice, and this consideration allows one a greater choice of functional form in empirical work in this field.
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