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Report from the year 2054: Empirical Correlates of "Utility"
It is the 50th anniversary of the HES bulletin board's discussion of "What
is Something Worth?," in which the notion of "utility" was alternatively
castigated (in a scholarly way, of course) and defended. Thus, it seems
appropriate, if not timely, to revisit that discussion in light of the
empirical breakthroughs in developing empirical correlates of "utility" in
the decades since.
The major breakthrough, came, of course, in 2032, when the noted
econo-psychologist/psycho-economist and experimentalist (and generally
smart cookie) Dr. Samuelson Snickerdoodle employed widely available
technologies to measure what is arguably an empirical correlate of
"utility." These technologies, widely available since the mid-20th century,
allowed the measurement of changes in the level of brain activity caused by
various stimuli the individual experienced. To put this in a way
consistent with utility notions, some heightened brain activities involved
increased pleasurable sensations, others involved increased discomfort, and
the experimenter could distinguish the two kinds of activities, and measure
their frequency and intensity. Restating this in language more acceptable
to current researchers in psychology, who today shy away from notions of
"pleasure" and "pain," correlated brain activities could be distinguished
and their frequency, intensity and topography measured.
Dr. Snickerdoodle's contribution had at least two components. One was
conceptual. He recognized that heightened pleasurable brain activities
might represent a convenient empirical interpretation of "utility", or (in
more understandable language not wrapped up in arcane philosophical
baggage) "satisfaction." His second contribution was technological. He
developed an inexpensive miniaturization of the electronic machinery that
allowed one to actually measure these "utility-correlate" changes using a
small machine the size of a hearing aid, so that data could be collected by
simply "sticking it in your ear", so to speak.[1] This allowed
experimentalists at campuses (to say nothing of drug rehab clinics) to use
the device to collect data from massive numbers of "subjects." Because Dr.
Snickerdoodle was not lacking in wit, he called the units he was measuring
"Jollies", as opposed to the more arcane "Utils" and the insufficiently
poetic "SATs", which also had the problem of reading suspiciously like a
college entrance exam.
As with most measurement breakthroughs, the device and the results it
produced were not universally accepted, for a wide variety of reasons.
These included:
1. The idea that, since man is, at least allegedly, a thinking being, there
is more to "satisfaction" (or "utility")--if those concepts have any
meaning--than "mere" changes in "pleasurable sensation" levels.
2. The Heisenberg Ear problem: By trying to measure how the individual
feels while he has something in his ear, we may not be getting measures of
how (s)he would in fact feel without something in his ear.
3. The Interpersonal Comparison Heisenberg Ear (or ICHE) problem: What if
different individuals are differentially affected by having something in
their ear? The long-standing problem of the probable illegitimacy of
interpersonal "utility-correlate" comparisons once again raises its ugly
head.
4. The idea that the market would create incentives to misreport results,
such as overstating the Jollies produced, and understating the possibility
of satiation from, drinking a whole bunch of Pepsi s. (To guard against
such dangers, many universities established Internal Ear Review Boards to
monitor compliance with sound ear research. Attempts to study the utility
effects of trying to deal with such Internal Ear Review Boards have gotten
no place, since the Boards typically refuse to approve such research).
5. A generalized fear that allowing psycho-economists to try to measure
Jollies was a Dr. Strangelovian step into a kind of world we did not want
to enter, one in which the government could monitor, and therefore
manipulate, our perceptions of our own well-being.
As one would expect, research proceeded even in the face of these potential
difficulties. From the vantage point of 2054, what can we say about the
bottom-line findings of this research?
1. While it is hard experimentally to hold everything constant, it does
appear that the marginal jollies (MJs) of most consumption goods do in fact
decline "sooner or later."
2. While most consumers do indeed often behave as though they were equating
MRSs to ratios of prices, English Department faculty do not (But see 4
below).
3. The MJs from reading entries on the HES chat line diminishes faster than
any other known good that has been tested.
4. There are some commodities that "otherwise rational" people purchase and
consume even though they produce no positive Jollies, and in fact increase
negative brain sensations (see any Heavy Metal rock album, and some
breakfast cereals). This has led to the well-known attempts to create a
more general rational choice theory incorporating "rational craziness."
(See in particular Gary Becker and Rush Limbaugh, "A Theory of Rational
Craziness," JPE May 2041)
5. Altruism does in fact sometimes generate a "warm glow" (that is, it
produces measurable "Jollies"), but never when making campaign
contributions.
6. People who vote get MJs from voting; those who fail to vote do not
(Recall that this was demonstrated by an experiment that induced people who
had no intention of voting to actually vote).
7. The on-going attempts, even in the face of the interpersonal comparison
or ICHE problem, to build a new welfare economics based on Jolly Summation
as a replacement for consumer surplus calculations. (See for example, the
fascinating work on the Sum Jolly Jolly Jolly measure by Israeli
economists).
More generally, this whole research episode is a fascinating example of how
the state of technology can affect whether a concept is a purely
theoretical construct--and one subject to considerable controversy about
its legitimacy-- or one that comes to have direct empirical application. It
also indicates the benefits of cross-disciplinary work, of keeping one's
ear to the ground for what is going on in other disciplines.
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[1] Writing in 2004, a technologically adept observer trained as an
experimental psychologist, though no longer working in that field, noted
that:
"around 1970, I designed and built from readily available components a
miniature biopotential transmitter that was about the size of a
wristwatch. Today I could build one small enough to fit on the head of
transducer (electrode). A commercial lab could easily make one that would
be barely visible. So the ear-minaturization idea is eminently do-able if
not actually done."
Robert Goldfarb
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