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Utility
Utility is a measure of a party's satisfaction with a certain state of the world.
The measure is intended to account for unintuitive quirks of human perception of value. A rich man is not as satisfied by receiving one dollar as a poor man would be, therefore the utility of the dollar is contextual, not objective.
In This Notebook
I use "utility" perhaps a bit loosely compared to Wikipedia.
If I say that some voluntary activity "has high utility", I mean that it is worth doing, even considering the expense (usually labor or dollars).
In this way "utility" is more of a signal that I'm speaking objectively, and that I've thought about
See Also
Sorites paradox resolutions in utility theory
Normative and Descriptive Utility
Normative utility is utility as self-reported, subject to the biases of the party.
Descriptive utility is utility as determined from the party's behavior.
Formulas
Utility as a function of a gain or loss of some commodity could be described with a function of the form
a\left(1 - \frac{1}{bx + 1}\right)
for cases where utility is expected to be bounded,
or where utility is expected to increase infinitely
\sqrt{ax} or \log_{a}(bx+1).
For all these functions f(0)=0,
meaning (as expected)
a net zero gain of the commodity
represents net zero utility.