The utility function measures a consumer’s preference for goods or services in terms of satisfaction. Learn how to calculate it and why it’s important to economists and businesses.

Utility is the fundamental variable thought to underlie economic choices. In particular, utility functions are believed to reflect preferences toward risk, a key decision variable in many real-life ...

We present a theoretical account of the origin of the shapes of utility, probability weighting, and temporal discounting functions. In an experimental test of the theory, we systematically change the ...