A utility function is a tool used to assign numerical values to a set of goods or services in order to allow for a numerical representation of the preferences of a rational individual. Though its first use dates back to the 18th century, the term “utility” does not appear until the late 19th century in Welfare Economics, and it is fully axiomatised only in the mid-20th century with the birth of Decision Theory, where the utility function is the central concept. Indeed, in several studies focused, e.g., on analysing the roles of the rationality axioms and their weakening, or in completing partial preferences, a utility function is always considered to be the proper tool to fully depict the attitude of an investor toward risk.

Utility Function / Favero, Gino. - STAMPA. - (2014), pp. 2607-2615. [10.4018/978-1-4666-5202-6.ch232]

Utility Function

FAVERO, Gino
2014-01-01

Abstract

A utility function is a tool used to assign numerical values to a set of goods or services in order to allow for a numerical representation of the preferences of a rational individual. Though its first use dates back to the 18th century, the term “utility” does not appear until the late 19th century in Welfare Economics, and it is fully axiomatised only in the mid-20th century with the birth of Decision Theory, where the utility function is the central concept. Indeed, in several studies focused, e.g., on analysing the roles of the rationality axioms and their weakening, or in completing partial preferences, a utility function is always considered to be the proper tool to fully depict the attitude of an investor toward risk.
2014
9781466652026
Utility Function / Favero, Gino. - STAMPA. - (2014), pp. 2607-2615. [10.4018/978-1-4666-5202-6.ch232]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11381/2494437
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