Glossary
Utility
What is utility?
Utility represents the value of outcomes in an economic model. In choice-based accounts, it represents preferences. It is not automatically a direct measure of pleasure or well-being.
Decision utility, experienced utility, and remembered utility
Kahneman, Wakker, and Sarin distinguish decision utility from experienced utility. Decision utility concerns the weight an outcome receives in a choice. Experienced utility concerns how an outcome feels.
A momentary report and a remembered evaluation answer different questions. What felt better at the time may differ from what is recalled more favorably later.
Example: the peak-end rule
In Kahneman and colleagues' 1993 cold-water experiment, many participants preferred to repeat a longer painful trial when its extra ending was less painful. The example helps distinguish remembered experience from discomfort over time.
The peak-end rule describes disproportionate weight on intense and final moments in some retrospective judgments. It does not establish that endings always matter more than duration or average quality.
Why it matters
A choice, a momentary experience, and a memory can disagree. State which one is being measured. Improving recollection does not erase an unpleasant experience or justify making it worse.