Back to Bentham? Explorations of experienced utility

Abstract

Two core meanings of “utility” are distinguished: “decision utility” is the weight of an outcome in a decision and “experienced utility” is hedonic quality, as in Bentham’s usage.Two core meanings of utility are distinguished. Decision utility is the weight of the 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. A formal normative theory of the total experienced utility of temporally extended outcomes is proposed. Measuring the experienced utility of outcomes permits tests of utility maximization and opens other lines of empirical research.