Abstract
The construct of utility has a long history in the social sciences. In the eighteenth century, Bernoulli (1738/1968) used the term to refer to a riskless construct associated with wealth. He noted that “a gain of one thousand ducats is more significant to a pauper than to a rich man, though both gain the same amount” (p.24). To capture this intuition, Bernoulli proposed the idea of diminishing marginal utility. Bentham (1823/1968) later discussed utility in hedonic terms of pleasure and pain. During this period, utility represented the subjective value, moral worth, or pleasure associated with an outcome. Then, in 1947, von Neumann and Morgenstern deduced the principle of maximizing expected utility from a set of preference axioms. Within this framework, utility is a risky construct linked to the satisfaction with an outcome in a decision context.
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Schwartz, A., Mellers, B.A., Metzger, T. (1999). Manipulating Hedonic Strategies of Choice. In: Shanteau, J., Mellers, B.A., Schum, D.A. (eds) Decision Science and Technology. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-5089-1_5
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