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In all of economics that I know, people maximize their Utility $U_i=f(x_1,...,x_n)$, and therefore make some kind of cost-benefit analysis.

One obvious criticism to this model is that we often do not have the right information on the $x_k$ (it is hard to have a parameter for altruism for instance).

But except from that, is this formalism irrefragable ? Or are they theoretical limitations, situations that it cannot account for ?

I would gladly accept any thought or reference on the subject

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  • $\begingroup$ What do you mean by "we often do not have the right information on the $x_k$"? Does this refer to the analyst or the decision-maker? $\endgroup$ – Oliv Mar 14 '16 at 19:14
  • $\begingroup$ I am trying to ask in a broad epistemologic way, to wonder about economics paradigm. In various cases I guess neither one or the other have this information. $\endgroup$ – Anthony Martin Mar 14 '16 at 19:19
  • $\begingroup$ A utility function is just an objective that the economic agent has. If he is altruistic, you can put that into the utility function. As long as people concioously behave according to some goals, usually you shouldn't have a problem putting it into a utility function. $\endgroup$ – BB King Mar 20 '16 at 23:58
  • $\begingroup$ Is consciously a reserve ? Cant you just put biases or things like that it in the utility function ? Like Kahneman-Tversky related work in behavioral economics ? $\endgroup$ – Anthony Martin Mar 21 '16 at 10:32

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