Back to Bentham? Explorations of Experienced Utility

Abstract

Two core meanings of \\xe2\\x80\\x9cutility\\xe2\\x80\\x9d are distinguished. \\xe2\\x80\\x9cDecision utility\\xe2\\x80\\x9d is the weight of an outcome in a decision. \\xe2\\x80\\x9cExperienced utility\\xe2\\x80\\x9d is hedonic quality, as in Bentham\\xe2\\x80\\x99s usage. Experienced utility can be reported in real time (instant utility), or in retrospective evaluations of past episodes (remembered utility). Psychological\\nresearch 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\\nthe experienced utility of outcomes permits tests of utility maximization and opens other lines of empirical research.