Difference between revisions of "Utility function"

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A utility function assigns numerical values to outcomes, in such a way that outcomes with higher values are always [[preferences|preferred]] to outcomes with lower values.
 
 
 
{{wikilink|Expected utility hypothesis}}
 
{{wikilink|Expected utility hypothesis}}
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A utility function assigns numerical values ("utilities") to outcomes, in such a way that outcomes with higher utilities are always [[preferences|preferred]] to outcomes with lower utilities.
 
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Revision as of 23:19, 28 August 2009

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A utility function assigns numerical values ("utilities") to outcomes, in such a way that outcomes with higher utilities are always preferred to outcomes with lower utilities.