Dave Krantz on utility and value

Dave had these comments on my recent thoughts on utility and value functions:

I [Dave] agree with the negatives about “utility” as a word and as a Platonic function (attached to each individual).

In teaching, I tend to discuss “subjective value.” In my decision making course for undergrads I talk about optimization with respect to “objective” values, including physical, biological, and economic indices (e.g., maximum area, maximum sustainable yield, maximum profit), and with respect to subjective value, measured in a variety of ways; then I emphasize that many decision rules do not maximize anything — because the weighting or even the existence of many goals is context dependent, and because some goals are converted into constraints. Optimization is thus subject to constraint and performed with context-dependent weights.

A standard use for “value function” in behavioral economics derives from Tversky & Kahneman’s Prospect Theory; one of the blog contributors complains about that. And the emphasis on choice of words leads another contributor to treat the issue as one of words, rather than concepts and facts, no more important than “degrees of freedom” (which, of course, is a venerable term used relatedly in physics and in statistics).

I don’t think there is an easy cure via terminology, though I feel you are on the right track here.