The utility function measures a consumer’s preference for goods or services in terms of satisfaction. Learn how to calculate it and why it’s important to economists and businesses.

In an experimental test of the theory, we systematically change the shape of revealed utility, weighting, and discounting functions by manipulating the distribution of monies, probabilities, and ...

This paper presents a critique of expected utility theory as a descriptive model of decision making under risk, and develops an alternative model, called prospect theory. Choices among risky prospects ...