A Definition of Luxury and Necessity for Cardinal Utility Functions

1989 ◽  
Vol 99 (397) ◽  
pp. 844 ◽  
Author(s):  
Timothy Besley
Keyword(s):  
Utility Functions ◽  
Cardinal Utility ◽  
Definition Of

Nonconcave Utility Maximization with Portfolio Bounds

2021 ◽  
Author(s):  
Min Dai ◽  
Steven Kou ◽  
Shuaijie Qian ◽  
Xiangwei Wan
Keyword(s):  
Finite Difference ◽  
Behavioral Economics ◽  
Difference Scheme ◽  
Viscosity Solution ◽  
Finite Difference Scheme ◽  
Utility Maximization ◽  
Utility Functions ◽  
Value Functions ◽  
Incentive Schemes ◽  
Definition Of

The problems of nonconcave utility maximization appear in many areas of finance and economics, such as in behavioral economics, incentive schemes, aspiration utility, and goal-reaching problems. Existing literature solves these problems using the concavification principle. We provide a framework for solving nonconcave utility maximization problems, where the concavification principle may not hold, and the utility functions can be discontinuous. We find that adding portfolio bounds can offer distinct economic insights and implications consistent with existing empirical findings. Theoretically, by introducing a new definition of viscosity solution, we show that a monotone, stable, and consistent finite difference scheme converges to the value functions of the nonconcave utility maximization problems. This paper was accepted by Agostino Capponi, finance.

Greener Transportation Infrastructure

2011 ◽  
pp. 394-421
Author(s):  
Jean-Christophe Fann ◽  
Jasenka Rakas
Keyword(s):  
Decision Making ◽  
Environmental Impact ◽  
Environmental Sustainability ◽  
Implementation Strategy ◽  
Utility Functions ◽  
Multi Criteria Decision Making ◽  
Capacity Enhancement ◽  
Environmental Impact Assessments ◽  
Definition Of ◽  
Evaluation Parameters

The presented methodology has two fundamental goals: first, to foster greener design practices among airport managers, planners, and designers, and second, to establish a dynamic dialogue between all airport stakeholders, while overcoming the shortcomings of traditional environmental impact assessments and thus ensuring capacity enhancement. The innovative aspects of the methodology are the combination of a flexible implementation strategy, the use of Multi-Criteria Decision Making (MCDM) with cost and utility functions, and a structured definition of environmental sustainability with customized evaluation parameters.

scholarly journals Space Invaders: Pedestrian Proxemic Utility Functions and Trust Zones for Autonomous Vehicle Interactions

2020 ◽  
Author(s):  
Fanta Camara ◽  
Charles Fox
Keyword(s):  
Autonomous Vehicles ◽  
Autonomous Vehicle ◽  
Utility Functions ◽  
Hyperbolic Function ◽  
The Road ◽  
Definition Of ◽  
Public Datasets ◽  
Discrete Theory ◽  
And Control ◽  
Road Crossing

AbstractUnderstanding pedestrian proxemic utility and trust will help autonomous vehicles to plan and control interactions with pedestrians more safely and efficiently. When pedestrians cross the road in front of human-driven vehicles, the two agents use knowledge of each other’s preferences to negotiate and to determine who will yield to the other. Autonomous vehicles will require similar understandings, but previous work has shown a need for them to be provided in the form of continuous proxemic utility functions, which are not available from previous proxemics studies based on Hall’s discrete zones. To fill this gap, a new Bayesian method to infer continuous pedestrian proxemic utility functions is proposed, and related to a new definition of ‘physical trust requirement’ (PTR) for road-crossing scenarios. The method is validated on simulation data then its parameters are inferred empirically from two public datasets. Results show that pedestrian proxemic utility is best described by a hyperbolic function, and that trust by the pedestrian is required in a discrete ‘trust zone’ which emerges naturally from simple physics. The PTR concept is then shown to be capable of generating and explaining the empirically observed zone sizes of Hall’s discrete theory of proxemics.

Cardinal Utility

2018 ◽  
pp. 95-116
Author(s):  
Ivan Moscati
Keyword(s):  
Cardinal Utility ◽  
Utility Analysis ◽  
Linear Transformations ◽  
Definition Of ◽  
Eventual Outcome

Chapter 6 reconstructs the progressive definition and stabilization of the current notion of cardinal utility as utility unique up to positive linear transformations. This notion was the eventual outcome of a long-lasting discussion, inaugurated by Vilfredo Pareto, regarding an individual’s capacity to rank transitions among different combinations of goods. This discussion continued through the 1920s and early 1930s and underwent a decisive acceleration from 1934 to 1938, that is, during the conclusive phase of the ordinal revolution. In this latter period, the main protagonists of the debate were Oskar Lange, Henry Phelps Brown, Roy Allen, Franz Alt, and Paul Samuelson. In the discussions that led to the definition of cardinal utility, some of these utility theorists began to envisage a broader notion of measurement according to which utility can be measurable even if no utility unit is available. Until the mid-1940s, however, cardinal utility remained peripheral in utility analysis.

Definition of an Offshore Petroleum Production System by Using Fuzzy Sets and Utility Functions

2005 ◽  
Vol 9 (6) ◽  
pp. 684-692 ◽  
Author(s):  
Tiago C. da Fonseca ◽  
◽  
José R. P. Mendes ◽  
Celso K. Morooka ◽  
Ivan R. Guilherme ◽  
...  
Keyword(s):  
Decision Making ◽  
Fuzzy Sets ◽  
Production System ◽  
Petroleum Industry ◽  
Utility Functions ◽  
Oil Field ◽  
Petroleum Engineering ◽  
Decision Making Process ◽  
Field Development ◽  
Definition Of

Field development is a very important task in the petroleum industry. Decisions in this area may lead either to profitable success or to expensive failures, and usually involve several distinct areas in the scope of Petroleum Engineering and Science, such as Geology, Petreoleum Engineering, Offshore Engineering and Economics. Therefore, these subjects must be well understood by teams supporting the decision-making process. This work proposes a methodology to support managers in one stage of field development: the definition of the field production system. In order to determinate the production system to be installed in an oil field, attributes such as investment, profitability, safety, environmental preservation and technological experience must be considered. A decision-making team or agent must weight these attributes in order to achieve solutions accordingly to the company strategies and objectives. Combining a few mathematical tools to represent the process, the methodology proposed herein is an approach that considers not only the financial variables involved in a field decision process, but might include other aspects, or attributes, also important to guide a decision. To this end, the application of Multi-Attribute Analysis concepts is suggested. Also, to support the decision-making agent, the approach follows Utility Functions concepts in order to numerically represent the agent trend or inclination to each option. Considering that subjectivity and imprecision are naturally involved in the decision-making process, the approach incorporates Fuzzy Sets Theory concepts as a means of formalizing the computation of this uncertainty.

scholarly journals Ordinal Or Cardinal Utility: A Note

Studia Humana ◽  
2014 ◽  
Vol 3 (1) ◽  
pp. 27-37
Author(s):  
Walter E. Block ◽  
Robert Wutscher
Keyword(s):  
Ideal Type ◽  
Utility Functions ◽  
Microeconomic Theory ◽  
Cardinal Utility ◽  
Mainstream Economic ◽  
Preference Relations ◽  
Official Position ◽  
Ordinal Preference

Abstract Modern microeconomic theory is based on a foundation of ordinal preference relations. Good textbooks stress that cardinal utility functions are artificial constructions of convenience, and that economics does not attribute any meaning to “utils.” However, we argue that despite this official position, in practice mainstream economists rely on techniques that assume the validity of cardinal utility. Doing so has turned mainstream economic theorizing into an exercise of reductionism of objects down to the preferences of ‘ideal type’ subjects.

Cardinal Utility Functions and Managerial Behavior

1960 ◽  
Vol 42 (1) ◽  
pp. 118 ◽  
Author(s):  
Albert N. Halter ◽  
Christoph Beringer
Keyword(s):  
Utility Functions ◽  
Cardinal Utility ◽  
Managerial Behavior

Preferences and Utility

2011 ◽  
Author(s):  
Yves Balasko
Keyword(s):  
Economic Theory ◽  
Utility Maximization ◽  
Budget Constraint ◽  
Utility Functions ◽  
Consumer Theory ◽  
Definition Of ◽  
Early Phases

Classical consumer theory is essentially the theory of utility maximization under a budget constraint. This theory starts with the definition of consumers' preferences. In classical consumer theory, preferences are assumed to be transitive, complete, monotone, and convex. These preferences can then be represented by utility functions. The latter are mathematically easier to handle than preferences. Another reason for being interested in utility functions goes back to the early phases of economic theory. Then, it was thought that utility functions could be used as a measure of consumer's satisfaction or utility. This chapter is devoted to a presentation of the basic issues regarding preferences and their representability by utility functions.

scholarly journals Games and teams with shared constraints

2017 ◽  
Vol 375 (2100) ◽  
pp. 20160302 ◽  
Author(s):  
Ankur A. Kulkarni
Keyword(s):  
Energy Management ◽  
Energy Systems ◽  
Utility Functions ◽  
System Level ◽  
Equilibrium Concept ◽  
Shared Constraints ◽  
The Future ◽  
Energy Domain ◽  
Key Issues ◽  
Definition Of

Energy systems of the future are envisaged to encompass multiple interacting autonomous entities. The theory of games provides the foundations for the design and analysis of such systems. This paper reviews models and results that would be of use for such analysis. Classically, games have involved players whose strategies are coupled only through the dependence of utility functions on strategies of other players. However, in many practical settings in the energy domain, system-level limitations bind the choices players can make. In 1965, Rosen ( Econometrica 33 , 520–534 ( doi:10.2307/1911749 )) pioneered the study of a class of games where there is a common constraint, called a shared constraint , that couples the strategies available to the players. We discuss how this seemingly benign extension has important ramifications, ranging from the very definition of an equilibrium concept, to other key issues such as existence, uniqueness and efficiency of equilibria. We show how the presence of a shared constraint naturally leads to notions of a price and forms the motivations for more recent models. Although most of the paper has the character of a survey, occasionally we also prove new results. This article is part of the themed issue ‘Energy management: flexibility, risk and optimization’.

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