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- Title
Back to Bentham? Explorations of experienced utility.
- Authors
Kahneman, Daniel; Wakker, Peter P.; Sarin, Rakesh
- Abstract
Two core meanings of "utility" are distinguished in the article. "Decision utility" is the weight of an outcome in a decision whereas "experienced utility" is hedonic quality, as in economist Jeremy Bentham's usage. The rejection of experienced utility is justified by two standard arguments, firstly, subjective hedonic experience cannot be observed or measured, and secondly, choices provide all necessary information about the utility of outcomes because rational agents who wish to do so will optimize their hedonic experience. Contrary to this position, the authors argue that experienced utility is both measurable and empirically distinct from decision utility. The basic building block of experienced utility in this analysis is instant utility a measure of hedonic and affective experience, which can be derived from immediate reports of current subjective experience or from physiological indices. Psychological research has documented systematic errors in retrospective evaluations, which can induce a preference for dominated options. The authors propose a formal normative theory of the total experienced utility of temporally extended outcomes. Measuring the experienced utility of outcomes permits tests of utility maximization and opens other lines of empirical research.
- Subjects
ECONOMIC research; UTILITY theory; QUALITY of life; BASIC needs; EXPERIENCE; DECISION making; PSYCHOLOGICAL research
- Publication
Quarterly Journal of Economics, 1997, Vol 112, Issue 2, p375
- ISSN
0033-5533
- Publication type
Article
- DOI
10.1162/003355397555235