Quarterly Journal of Economics Vol. 112 No. 2 1997

Back to Bentham? Explorations of Experienced Utility

D. Kahneman^1,2; Peter P. Wakker³; Rakesh K. Sarin⁴

¹ Woodrow Wilson International Center for Scholars · ² Princeton University · ³ Leiden University · ⁴ University of California, Los Angeles

Abstract

Two core meanings of “utility” are distinguished. “Decision utility” is the weight of an 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. We propose a formal normative theory of the total experienced utility of temporally extended outcomes. Measuring the experienced utility of outcomes permits tests of utility maximization and opens other Unes of empirical research.

DOI

10.1162/003355397555235

Volume

112

Issue

2

Pages

375-406

Language

en

Sources

bibtex:phds-export.bib openalex crossref

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