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In economics, utility is a measure of a certain person's satisfaction from a certain state of the world. Over time, the term has been used with at least two meanings. In a normative context, utility refers to a goal or objective that we wish to maximize, i.e., an objective function.
In the study of economics, the term marginal refers to a small change, starting from some baseline level. Philip Wicksteed explained the term as follows: . Marginal considerations are considerations which concern a slight increase or diminution of the stock of anything which we possess or are considering. [4]
In economics, a random utility model (RUM), [1] [2] also called stochastic utility model, [3] is a mathematical description of the preferences of a person, whose choices are not deterministic, but depend on a random state variable.
In economics, discounted utility is the utility (desirability) of some future event, ... Sometimes it is explained as the degree of a person's patience.
In welfare economics and social choice theory, a social welfare function—also called a social ordering, ranking, utility, or choice function—is a function that ranks a set of social states by their desirability.
E.g., the commodity is a heterogeneous resource, such as land. Then, the utility functions are not functions of a finite number of variables, but rather set functions defined on Borel subsets of the land. The natural generalization of a linear utility function to that model is an additive set function.
“Energy-related economic policies, incentives for renewable energy, tariffs and environmental regulation all hit home in terms of utility bills,” said Nick Barber, manager at Utilities Now, an ...
This is the expected utility hypothesis. As stated, the hypothesis may appear to be a bold claim. The aim of the expected utility theorem is to provide "modest conditions" (i.e. axioms) describing when the expected utility hypothesis holds, which can be evaluated directly and intuitively: