Utility: Anticipated, Experienced, and Remembered
Abstract
Modern conceptions of utility are rooted in the system that Jeremy Bentham proposed to determine which actions and laws most benefit the most people. Bentham believed that the value of every action could be quantified in terms of its utility – the intensity of pleasure or pain that it caused, as well as the duration of its influence, its uncertainty, and its propinquity or remoteness. The value of every action was thus a function of the total pleasure and pain it elicited, weighted by its duration, certainty, and when it would happen (Bentham, 1789). This system, which fell out of favor among economists of the twentieth century, serves as the basis of much of the research examining the pleasure and pain derived from experiences and normative decision making today (Bruni & Sugden, 2007; Read, 2007). In this chapter, I review the history of the concept from Bentham to the present (Historical Background), distinctions between different kinds of utility and judgments (Components and Judgments of Experienced Utility), how utility is measured (Measuring Instant and Total Utility), contextual factors that influence the utility associated with experiences (Context Dependence), how experienced utility is evaluated prospectively and retrospectively (Predicted and Remembered Utility), and why people make decisions that do not maximize utility (Maximization Failures).
Cite this
Carey K. Morewedge (2015). Utility: Anticipated, Experienced, and Remembered. SSRN Electronic Journal.
@article{k2015utility,
title = {Utility: Anticipated, Experienced, and Remembered},
author = {Morewedge, Carey K.},
year = {2015},
journal = {SSRN Electronic Journal}
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