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LIMITS OF NEOCLASSICAL UTILITY THEORY AND SOME POSSIBLE WAYS HOW TO OVERCOME THEM

Radim Valenčík and Petr Wawrosz

Economy & Business Journal, 2016, vol. 10, issue 1, pages 23-31

Abstract: The article discusses some limits of the neoclassical utility theory and it offers certain possible ways of overcoming them. Our aim is not to create an absolutely new utility theory but to show possible extensions of the existing ones and to highlight productive aspects of consumption. In an attempt to overcome the limits of the neoclassical utility theory, we briefly review the previous attempts and subsequently we emphasize the fact that experience is created based on previous perception and that the synthesis of previous perception, beliefs and attitudes fulfils a double role: on one hand, it substantially increases the motivation to own goods or to perform certain activities as intermediary factors, and, on the other hand, it disconnects current activities of a human being from their original targets. We also discuss how human experience accumulates over time and how it affects both total and marginal utility.

Keywords: utility; consumption; investment; imagination capital; utility maximization (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2016
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Persistent link: http://EconPapers.repec.org/RePEc:isp:journl:v:10:y:2016:i:1:p:23-31

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