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Measuring utility by a single‐response sequential method
Author(s) -
Becker Gordon M.,
Degroot Morris H.,
Marschak Jacob
Publication year - 1964
Publication title -
behavioral science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.371
H-Index - 45
eISSN - 1099-1743
pISSN - 0005-7940
DOI - 10.1002/bs.3830090304
A person deciding on a career, a wife, or a place to live bases his choice on two factors: (1) How much do I like each of the available alternatives? and (2) What are the chances for a successful outcome of each alternative? These two factors comprise the utility of each outcome for the person making the choice. This notion of utility is fundamental to most current theories of decision behavior. According to the expected utility hypothesis, if we could know the utility function of a person, we could predict his choice from among any set of actions or objects. But the utility function of a given subject is almost impossible to measure directly. To circumvent this difficulty, stochastic models of choice behavior have been formulated which do not predict the subject's choices but make statements about the probabilities that the subject will choose a given action. This paper reports an experiment to measure utility and to test one stochastic model of choice behavior.