Expected Utility Theory
A theory in economics that models how rational individuals make decisions under risk by maximizing the expected utility of their choices.
319 topics found for
“utility”
Standard Economic Model
A theoretical framework in economics that assumes individuals act rationally and seek to maximize utility, used to predict economic behavior and outcomes.
Paradox of Value
An economic theory that explains why some necessities, such as water, are less expensive than non-essentials, like diamonds, despite their greater utility.
Instrumental Value
The worth of something based on its ability to help achieve a desired end or goal.
Homo Economicus
A theoretical concept in economics that portrays humans as rational and self-interested agents who aim to maximize their utility.
Allais Paradox
A decision-making paradox that shows people's preferences can violate the expected utility theory, highlighting irrational behavior.
Minimize Waste
A principle in lean management aimed at reducing non-value-added activities to improve efficiency.
Decision Utility
The value or satisfaction derived from a decision, influencing the choices people make.
Discounted Utility
A concept in behavioral economics that describes how future benefits are perceived as less valuable than immediate ones.