utility function

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Utility function

A mathematical expression that assigns a value to all possible choices. In portfolio theory, the utility function expresses the preferences of economic entities with respect to perceived risk and expected return.

Utility Function

The expression of desire in mathematical terms. Utility function is important in investing; it may show the usefulness of investing in some securities as opposed to different ones. For instance, a stock with low risk and a high return has a higher utility function than a stock with high risk and a low return. See also: Marginal Utility.

utility function

a function denoting the quantities of goods and services that an individual consumes, of the form:

where U_t = total utility and x₁ ,x₂ . products consumed.

In order to achieve CONSUMER EQUILIBRIUM, the individual will select a combination of products, in line with his preferences, that maximizes his TOTAL UTILITY from his given income. See

CARDINAL UTILITY, ORDINAL UTILITY, MARGINAL UTILITY utility maximization see CONSUMER EQUILIBRIUM.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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The utility function of an individual under coercion from the full social income maximizes when the rate of technical substitution in consumption (the slope of the curve of indifference of the maximizer individual, denoted Ui) is equal to the technical rate of substitution in production (slope of the curve of production possibilities, denoted CPP, of the maximizer individual), i.e.

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(3) However, this result applies only to the singular class of cubic utility functions, for which changes in risk at orders above the third are irrelevant.

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By this definition, visual satisfaction level could be modeled as a utility function of variables describing the physical conditions, and preference is a comparative result of comparing the utility values corresponding to two (or more) conditions.

The Influence of Lighting Conditions, Shading Patterns and Weather on Occupant Visual Preferences in Perimeter Building Zones

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I have observed in a variety of universities, especially in the United States, that professors and supervisors encourage their students to play around with the models, to try to make them more realistic, to infuse a degree of humanity in the utility functions and the assumptions.

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If the utility functions are interdependent, the endogenous variable for price and quantity in each equation should be significant.

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Figure 1 compares two exponential utility functions for varying levels of risk tolerance - risk averse vs.

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Some of them are chosen from the previous works and some factors are newly defined in the proposed utility function. In this paper, the utility function is also adopted as a decision-making criterion in the assessment and selection of parking.

A Dynamic Information-Based Parking Guidance for Megacities considering Both Public and Private Parking

where the utility functions [U.sub.1](x) and [U.sub.2](x) are risk aversion functions.

Closed-Form Optimal Strategies of Continuous-Time Options with Stochastic Differential Equations

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