In this problem, the optimal path is one that maximizes the expected utility, with the utility function being piecewise-linear and concave. Such a utility function can be used to approximate nonlinear ...

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.

The paper studies the problem of maximizing the expected utility of terminal wealth in the framework of a general incomplete semimartingale model of a financial market. We show that the necessary and ...

The utility function can be used to derive the demand function, and both concepts relate to utility maximization.