I am interested in the cases where a decision maker possesses a multiattribute utility function ($u$) of the form:

$u(x) = \sum\limits_{i=1}^{n} u_i(x)$, with $x=(x_1, \ldots, x_m)$, and where $u_{i \in [1, n]}$ is a multiattribute nonlinear utility function.

In particular, what is their relevance in microeconomics, utility theory, and decision-making in general? Are there any examples or references?


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    $\begingroup$ What kind of situation does such a utility function represent? It would be useful to include that kind of information to your post. Does it refer to a single person or is it some form for a social welfare function? Mathematical entities in Economics are interesting to the degree that they can be mapped to a real-world situation. It appears you are asking us about that, but it doesn't work that way. Why are you interested in such a utility function? $\endgroup$ Feb 28 '17 at 19:34
  • $\begingroup$ Here are two examples of applications of non-linear multiattribute utility functions: link1, link2. $\endgroup$
    – rmas
    Mar 3 '17 at 5:26

These are sometimes known as "quasi-separable utility functions". A recent paper that describes the theory is Quasi-Separable Utility by Qin and Rommeswinkel.

Utility of this form arises fairly naturally in macro and finance. If your current utility depends on lagged consumption as well as current, then you get utility of this form, $$ \sum_{t=1}^\infty u(C_{t-1}, C_t), $$ where $C_t$ is time $t$ consumption. One particularly common form is $$ \sum_{t=1}^\infty u(C_{t} - h C_{t-1}), $$ which is known as habit utility, since it captures (for $h > 0$) the idea that get used to a certain level of consumption, so if it drops you are very unhappy.


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