Utility: Anticipated, Experienced, and Remembered
In G. Keren and G. Wu (Eds.), Blackwell Handbook of Judgment and Decision Making, 2nd Edition. Malden, MA: Blackwell Press, Forthcoming
83 Pages Posted: 29 Oct 2014
Date Written: July 1, 2014
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 20th 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 (I), distinctions between different kinds of utility and judgments (II), how utility is measured (III), contextual factors that influence the utility associated with experiences (IV), how experienced utility is evaluated prospectively and retrospectively (V), and why people make decisions that do not maximize utility (VI).
Keywords: Experienced Utility, Remembered Utility, Savoring, Dread, Affective Forecasting
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