Perception, utility, and evolution

José F. Tudón M. ()
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José F. Tudón M.: ITAM

Economic Theory Bulletin, 2019, vol. 7, issue 2, No 3, 208 pages

Abstract: Abstract This paper presents a model of the evolution of the hedonic utility function in which perception is imperfect. Netzer (Am Econ Rev 99(3):937–955, 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 (search for similar items in EconPapers)
JEL-codes: D81 D83 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s40505-018-0153-8

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