utility maximization is composable, so you can take every single domain where utility maximization works, and compose it into one big utility maximization model—mathematically it should work (with some standard assumptions about types of error we have in small domain models, assumptions which might be false).
Sure! I don’t doubt this at all. I’m not saying that you cannot in principle build some humongous utility function that is a justifiable fit to what I, a particular human, want. BUT the point is that it isn’t feasible in practise—hence my statement in the original post:
I will claim that trying to run your life based upon expected utility maximization is not a good idea
What I was trying to do was more trying to figure out rough approximation of my utility function descriptively, to see if any of my actions are extremely irrational—like wasting too much time/money on something I care about very little, or not spending some time/money on something I care about a lot.
OK, but then the question is how do you approximate a mathematical function from a set X to R, especially when your biggest problem is not being able to enumerate the elements of X? If you miss out most of the elements of X, then no possible assignment of numbers to those that you do include will constitute a good approximation to the function.
Approximation is likely to be a list of “I value event X relative to default state at Y utilons”, following economic tradition of focusing on the marginal. Skipping events from this list doesn’t affect comparisons between events on the list.
Next I look at utilons to costs ratios, and do more of things which result in events with high ratios, and less of things which result in events with low ratios.
By the way, as the function is marginal, value of money will be approximately linear, extra $100 is worth pretty much 100 times more than extra $1, it only breaks down on very large $s that significantly affect your net worth.
Sure! I don’t doubt this at all. I’m not saying that you cannot in principle build some humongous utility function that is a justifiable fit to what I, a particular human, want. BUT the point is that it isn’t feasible in practise—hence my statement in the original post:
What I was trying to do was more trying to figure out rough approximation of my utility function descriptively, to see if any of my actions are extremely irrational—like wasting too much time/money on something I care about very little, or not spending some time/money on something I care about a lot.
OK, but then the question is how do you approximate a mathematical function from a set X to R, especially when your biggest problem is not being able to enumerate the elements of X? If you miss out most of the elements of X, then no possible assignment of numbers to those that you do include will constitute a good approximation to the function.
I like this idea, though.
Approximation is likely to be a list of “I value event X relative to default state at Y utilons”, following economic tradition of focusing on the marginal. Skipping events from this list doesn’t affect comparisons between events on the list.
But what will you do with your incomplete list:
I value event make $x relative to default state at log(x) utilons
I value event play computer game relative to default state at 30 utilons
I value event marry woman of my dreams relative to default state at 1600 utilons
…
once you’ve compiled it? what do you do with the “utilon” numbers?
Next I look at utilons to costs ratios, and do more of things which result in events with high ratios, and less of things which result in events with low ratios.
By the way, as the function is marginal, value of money will be approximately linear, extra $100 is worth pretty much 100 times more than extra $1, it only breaks down on very large $s that significantly affect your net worth.