Back to Bentham? Explorations of Experienced Utility

Two core meanings of “utility” are distinguished. “Decision utility” is the weight of an outcome in a decision. “Experienced utility” is hedonic quality, as in Bentham's usage. Experienced utility can be reported in real time (instant utility), or in retrospective evaluations of past episodes (...

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Bibliographic Details
Published in:The Quarterly journal of economics 1997-05, Vol.112 (2), p.375-406
Main Authors: Kahneman, Daniel, Wakker, Peter P., Sarin, Rakesh
Format: Article
Language:English
Subjects:
Analysis
Colonoscopy
Economic theory
Economic utility
Economics
Experimentation
Memory
Normativity
Pleasure
Psychological aspects
Studies
Toasters
Total utility
Utilitarianism
Utility functions
Utility maximization
Utility theory
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Summary:Two core meanings of “utility” are distinguished. “Decision utility” is the weight of an outcome in a decision. “Experienced utility” is hedonic quality, as in Bentham's usage. Experienced utility can be reported in real time (instant utility), or in retrospective evaluations of past episodes (remembered utility). Psychological research has documented systematic errors in retrospective evaluations, which can induce a preference for dominated options. We 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 Unes of empirical research.
ISSN:0033-5533
1531-4650
DOI:10.1162/003355397555235