Utility

What is Utility

In economics, utility is a measure of the satisfaction that a certain person has from a certain state of the world. Over time, the term has been used in two different meanings.The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism, by moral philosophers such as Jeremy Bentham and John Stuart Mill. In this context, the utilities of different people in the same state are comparable. In particular, one can compute the sum of all peoples' utilities in each state, and choose the state in which the sum is maximized; this leads to the utilitarian rule of social choice.The term has been adapted and reapplied within neoclassical economics, which dominates modern economic theory, as a representation of a consumer's ordinal preferences over a choice set. In this context, utility is not comparable across different consumers or possessing a cardinal interpretation. In fact, every monotone transformation of a utility function represents the same ordinal ranking over the alternatives, and thus is equivalent from the neoclassical economics point of view. In game theory, too, utility is used in the same meaning. This concept of utility is personal and based on choice rather than on pleasure received, and so requires fewer behavioral assumptions than the original concept.

How you will benefit

(I) Insights, and validations about the following topics:

Chapter 1: Utility

Chapter 2: Indifference curve

Chapter 3: Arrow's impossibility theorem

Chapter 4: Social welfare function

Chapter 5: Consumer choice

Chapter 6: Welfare economics

Chapter 7: Expected utility hypothesis

Chapter 8: Utility maximization problem

Chapter 9: Marshallian demand function

Chapter 10: Ordinal utility

Chapter 11: Cardinal utility

Chapter 12: Revealed preference

Chapter 13: Constant elasticity of substitution

Chapter 14: Quasilinear utility

Chapter 15: Von Neumann-Morgenstern utility theorem

Chapter 16: Preference (economics)

Chapter 17: Preference

Chapter 18: Debreu's representation theorems

Chapter 19: Multi-attribute utility

Chapter 20: Dichotomous preferences

Chapter 21: Responsive set extension

(II) Answering the public top questions about utility.

(III) Real world examples for the usage of utility in many fields.

Who this book is for

Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Utility.