| 单词 | utility maximization |
| 释义 | utility maximization The device of explaining choice in consumption and labour markets by assuming that individuals have utility functions which they attempt to maximize. This is done by choosing the quantities of all goods consumed so that their marginal utilities are proportional to their prices and choosing the amounts of various forms of work done so that their marginal disutilities are proportional to their wage rates. Where choices have to be made under conditions of quantifiable uncertainty, or risk, the objective becomes that of maximizing expected utility. Where uncertainty is not quantifiable, applying the concept is difficult. It is far from clear, too, that people know their own utility functions; there may be no method—except experiment—of discovering how much one would enjoy a new product. As with the theory of the firm, some behavioural economists hold that satisficing is a more relevant model than optimizing. Individuals spend partly out of habit and partly by random experiment. They persist in any form of expenditure so long as it gives acceptable results, and react to unsatisfactory results or new opportunities by trial and error. |
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