<p>I believe what you're getting at is a concept in economics called "Loss Aversion". It has been used quite extensively in recent economic research, especially in behavioral economics and finance. Another important key word here is "Prospect Theory", which encompasses loss aversion as well. </p>

<p>The basic idea is that people suffer more from a loss of x\$ than they enjoy a gain of x\$ compared to a reference point. The utility function has a different (smaller in absolute value) slope when moving in a positive direction from the reference point than when moving in a negative direction. This is illustrated by the graph below (source: <a href="https://upload.wikimedia.org/wikipedia/commons/4/4e/Valuefun.jpg" rel="nofollow noreferrer">https://upload.wikimedia.org/wikipedia/commons/4/4e/Valuefun.jpg</a>).</p>

<p><a href="https://i.sstatic.net/pG738.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/pG738.jpg" alt="enter image description here"></a></p>

<p>Under these conditions,  utility and disutility are different. Otherwise, maximizing untility or minimizing disutility is the same, as you mentioned. </p>

<p>This insight goes back to Amos Tversky and Daniel Kahneman.Kahneman received the Nobel Prize in Economics in 2002 for this work.</p>

<p>A summary of the most important literature can be found for example here: <a href="http://loss-aversion.behaviouralfinance.net/" rel="nofollow noreferrer">http://loss-aversion.behaviouralfinance.net/</a></p>

CC BY-SA 3.0
2016-10-19T11:32:51.560Z
2016-10-19T15:39:16.387Z
2016-10-19T15:39:16.387Z
BB King
<p>DISCLAIMER: This could very well be all bogus, I'm talking about my intuition as a beginner/intermediate economics student, you have been warned.</p>

<p>I got the feeling agents do not just maximize utility but minimize disutility as well. Now my understanding is that from the convexity assumption follows that those problems would have the same optimum. But I think it could very well be the case that the utility function does not at all look like the disutility function (also different variables) and optimum of those two functions need not be unique (Am I with the duality gap on the right track?).</p>

<p>If this at all a valid intuition I would appreciate some pointers to empirical studies that examines utility and disutiliy, or some theories that incorporate the notion of disutiliy (not just as an inverse of utility) into preferences.</p>

<p>P.S. I got the idea while reading about The Paradox of Choice from Barry Schwartz (more choices could lead to confusion and in my interpretation disutiliy)</p>

CC BY-SA 3.0
2016-10-18T07:31:39.147Z
What do you think you mean by "utility" and "disutility"? What does it mean to you to talk about maximising the former and minimising the latter?
410 gone
<utility><preferences>
maximize untility AND minimize disutility
user10760
# maximize untility AND minimize disutility

(Asked by: username_0 on 2016-10-17)

DISCLAIMER: This could very well be all bogus, I'm talking about my intuition as a beginner/intermediate economics student, you have been warned.

I got the feeling agents do not just maximize utility but minimize disutility as well. Now my understanding is that from the convexity assumption follows that those problems would have the same optimum. But I think it could very well be the case that the utility function does not at all look like the disutility function (also different variables) and optimum of those two functions need not be unique (Am I with the duality gap on the right track?).

If this at all a valid intuition I would appreciate some pointers to empirical studies that examines utility and disutiliy, or some theories that incorporate the notion of disutiliy (not just as an inverse of utility) into preferences.

P.S. I got the idea while reading about The Paradox of Choice from Barry Schwartz (more choices could lead to confusion and in my interpretation disutiliy)

**Tags:** utility, preferences
> **Comments:**
> **username_1**: What do you think you mean by "utility" and "disutility"? What does it mean to you to talk about maximising the former and minimising the latter?  

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## 1 answers

### Answer by username_2 on 2016-10-19. Score: 2

I believe what you're getting at is a concept in economics called "Loss Aversion". It has been used quite extensively in recent economic research, especially in behavioral economics and finance. Another important key word here is "Prospect Theory", which encompasses loss aversion as well.

The basic idea is that people suffer more from a loss of x\$ than they enjoy a gain of x\$ compared to a reference point. The utility function has a different (smaller in absolute value) slope when moving in a positive direction from the reference point than when moving in a negative direction. This is illustrated by the graph below (source: <https://upload.wikimedia.org/wikipedia/commons/4/4e/Valuefun.jpg>).

[![enter image description here](https://i.sstatic.net/pG738.jpg)](https://i.sstatic.net/pG738.jpg)

Under these conditions, utility and disutility are different. Otherwise, maximizing untility or minimizing disutility is the same, as you mentioned.

This insight goes back to Amos Tversky and Daniel Kahneman.Kahneman received the Nobel Prize in Economics in 2002 for this work.

A summary of the most important literature can be found for example here: <http://loss-aversion.behaviouralfinance.net/>


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