Utility

: This article is about "utility" in economics and in game theory. For utility companies and similar concepts, see public utility. For utilities in computers, see computer software. See also Utility (patent)

Related Topics:
Public utility - Computer software - Utility (patent)

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In economics, utility is a measure of the happiness or satisfaction gained from a good or service.

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The concept is applied by economists in such topics as the indifference curve, which measures the combination of a basket of commodities that an individual or a community requests at a given level(s) of satisfaction. The concept is also used in utility functions, social welfare functions, Pareto maximization, Edgeworth boxes and contract curves. It is a central concept of welfare economics.

Related Topics:
Indifference curve - Social welfare function - Pareto maximization - Edgeworth box - Contract curve - Welfare economics

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The doctrine of utilitarianism saw the maximisation of utility as a moral criterion for the organisation of society. According to utilitarians, such as Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1876), society should aim to maximise the total utility of individuals, aiming for 'the greatest happiness for the greatest number'.

Related Topics:
Utilitarianism - Jeremy Bentham - John Stuart Mill

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Utility theory assumes that humankind is rational. That is, people maximize their utility wherever possible. For instance, one would request more of a good if it is available and if one has the ability to acquire that amount, if this is the rational thing to do in the circumstances.

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