utilityvary

Utilityvary is a conceptual construct used in decision theory and behavioral economics to describe the responsiveness of an individual's utility to changes in outcomes, context, or attributes of a choice problem. The term is used to capture variability in how people evaluate options across situations, beyond fixed preference orderings.

In formal models, utilityvary is represented as the derivative or elasticity of the utility function with respect to a variable of interest. If U(x, c) is the utility of outcome x under context c, utilityvary with respect to c can be measured by the partial derivative ∂U/∂c or by the elasticity E = (∂U/∂c) * (c/U).

Applications include pricing and welfare analysis under context effects, adaptive preferences, and algorithmic decision-making where agents' goals shift with information or feedback. Researchers may treat utilityvary as a parameter to explain deviations from standard expected utility or to design mechanisms robust to changing preferences.

Estimation typically relies on experimental or observational data, using regression, structural models, or machine learning to infer how utility changes with covariates. Limitations include identifiability, the challenge of separating taste from beliefs, and the context-dependence of measurements. Critics note that utilityvary assumes a cardinal interpretation of utility that may not hold in all settings.

Related concepts include context effects, preference learning, risk aversion, and elasticity of substitution. The concept is used more often in theoretical work and in studies of dynamic or adaptive preferences.