Perception, Utility and Evolution

20 Pages Posted: 16 Nov 2016

Date Written: October 14, 2016

Abstract

This paper presents a model of the evolution of the hedonic utility function in which perception is imperfect. Netzer (2009) considers a model with perfect perception and finds that the optimal utility function allocates marginal utility where decisions are made frequently. This paper shows that it is also beneficial to allocate marginal utility away from more perceptible events. The introduction of perceptual errors can lead to qualitatively different utility functions, such as discontinuous functions with flat regions rather than continuous and strictly increasing functions.

Keywords: Evolution, Hedonic Utility, Perception

JEL Classification: D81, D83

Suggested Citation

Tudón, José, Perception, Utility and Evolution (October 14, 2016). Available at SSRN: https://ssrn.com/abstract=2869264 or http://dx.doi.org/10.2139/ssrn.2869264

José Tudón (Contact Author)

ITAM Business School ( email )

Av. Camino a Santa Teresa 930
Colonia Heroes de Padierna
Mexico City, Magdalena Contreras 10700
Mexico

HOME PAGE: http://jtudon.com

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
67
Abstract Views
491
Rank
731,547
PlumX Metrics