UTILITY THEORY

Utility theory is a sociological term used to quantify satisfaction. Economists have devised theorems which attempt to give ways to measure the satisfaction that we derive from items that we buy. The best definition of utility theory is that there is a correlation between the utility of and the price that we are willing to pay. This is a disappointing definition.

General economic thought states that we cannot directly measure satisfaction or happiness from something we buy or a service that is provided to us. It seems that economists look to more indirect methods of quantifying utility. For example, economists might say that our happiness can only be effectively measured based on how much we spend for something. This should give us pause.

We can’t quantify satisfaction? We can’t quantify the happiness and satisfaction of our clients who use the spaces that we design and who pay us to shape these enclosures?

Before we throw up our hands in despair, we should consider the two sub schools of utility theory; cardinal utility and ordinal utility.

Cardinal utility theory tries to apply units of magnitude to the options before us. For example, cardinal utility might assign values to different choices; a glass of orange juice (120), a cup of coffee (80), or a glass of water (40). Under the rules of cardinal theory, we can say that the utility of orange juice over coffee is the same magnitude as coffee is over water. As you might guess, the reason that cardinal utility has fallen to disfavor is because it really does not accomplish much.

Ordinal utility theory throws out the utility quantities. So in the above example, ordinal theory can only say that orange juice is preferred to coffee. That is to say, ordinal can only say that something is more preferred; it cannot say by how much.

And because of these deficiencies, Kahneman developed his prospect theory, which has been broached on an earlier page. In short, prospect theory states that we make decisions based on the risk of the unknown compared with the what is comfortable and expected.

We spoke a couple of pages ago about the benefits of the incorporation of facts into our milieu so as to increase the precision of our work. How about also the incorporation of a satisfaction quantity into our discussions and thinking?

So we cannot quantify our client’s satisfaction by being provided with an open space filled with natural light vs one that is made darker with traditional windows and low ceilings? We cannot quantify the utility of a room with great views vs one with small traditional windows? Nobody in the design field is working on the risk vs the rewards of client decision making?

What the hell are we doing? I just find this disheartening.