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Although there are at least four sources of uncertainty - the attribute outcomes, and a decisionmaker's fuzziness about: a) the specific shapes of the individual attribute utility functions, b) the aggregating constants' values, and c) whether the attribute utility functions are additive, these terms being addressed presently - uncertainty ...
The term E-utility for "experience utility" has been coined [2] to refer to the types of "hedonistic" utility like that of Bentham's greatest happiness principle. Since morality affects decisions, a VNM-rational agent's morals will affect the definition of its own utility function (see above).
A utility function is considered to be measurable, if the strength of preference or intensity of liking of a good or service is determined with precision by the use of some objective criteria. For example, suppose that eating an apple gives to a person exactly half the pleasure of that of eating an orange.
Standard utility functions represent ordinal preferences. The expected utility hypothesis imposes limitations on the utility function and makes utility cardinal (though still not comparable across individuals). Although the expected utility hypothesis is standard in economic modeling, it is violated in psychological experiments.
A social utility frontier (also called a grand utility frontier) can be obtained from the outer envelope of all these utility functions. Each point on a social utility frontier represents an efficient allocation of an economy's resources; that is, it is a Pareto optimum in factor allocation, in production, in consumption, and in the interaction ...
Download as PDF; Printable version; In other projects Wikidata item; ... This category is for specific utility functions, properties or classes of utility functions.
A single-attribute utility function maps the amount of money a person has (or gains), to a number representing the subjective satisfaction he derives from it. The motivation to define a utility function comes from the St. Petersburg paradox: the observation that people are not willing to pay much for a lottery, even if its expected monetary gain is infinite.
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.