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5 - Two-Dimensional Utility Analysis

Published online by Cambridge University Press:  28 July 2009

Paul Weirich
Affiliation:
University of Missouri, Columbia
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Summary

Analysis of the social utility of a new safety standard in Section 1.1 used two dimensions, people and their goals. Chapters 3 and 4 introduced a third dimension, possible outcomes. I have not yet presented group utility analysis, in which the dimension of analysis is people; that is reserved for Chapter 6. But having presented intrinsic utility analysis and expected utility analysis, in which the dimensions of analysis are goals and possible outcomes, respectively, I may undertake a two dimensional analysis of an option's utility for a person.

A two-dimensional analysis expands a point in one dimension of analysis along the other dimension of analysis. In this chapter's two dimensional analysis, the expansion takes place at an outcome, a point in the dimension for expected utility analysis. A possible world serves as the outcome, and its utility equals its intrinsic utility. Hence an intrinsic utility analysis may decompress its utility along the dimension of goals.

The two-dimensional framework makes my decision space more versatile. Using it, intrinsic and expected utility analyses may conjointly dissect an option's utility. This chapter explores the analytic fruits of two-dimensionality. It uses intrinsic utilities to compute comprehensive utilities of options given uncertainty.

INTRINSIC AND EXPECTED UTILITY ANALYSES COMBINED

Chapter 1 outlined multidimensional utility analysis. It involves the conjoint application of two or more independent forms of utility analysis.

Type
Chapter
Information
Decision Space
Multidimensional Utility Analysis
, pp. 149 - 167
Publisher: Cambridge University Press
Print publication year: 2001

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