UTILITY
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. This kind of utility bears a closer resemblance to the original utilitarian concept, developed by moral philosophers such as Jeremy Bentham and John Stuart Mill.
In a descriptive context, the term refers to an apparent objective function; such a function is revealed by a person's behavior, and specifically by their preferences over lotteries, which can be any quantified choice.
The relationship between these two kinds of utility functions has been a source of controversy among both economists and ethicists, with most maintaining that the two are distinct but generally related.
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- 2025-05-06T00:00:00.000000Z
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