Noun

Singular utility

Plural utilities

utility (plural utilities)

1. The state or condition of being useful; usefulness.
2. Something that is useful.
3. (economics) The ability of a commodity to satisfy needs or wants; the satisfaction experienced by the consumer of that commodity.
4. (business, finance) A service provider, such as an electric company or water company or its securities.
5. (computing) A software program specifically designed to help manage and tune the computer hardware, operating system or application software, and perform a single task or a small range of tasks; as opposed to application software which tend to be software suites.

Synonyms

• (state of being useful): usefulness
• See also Wikisaurus:utility

In economics, utility is a measure of the relative satisfaction from, or desirability of, consumption of various goods and services. Given this measure, one may speak meaningfully of increasing or decreasing utility, and thereby explain economic behavior in terms of attempts to increase one's utility. For illustrative purposes, changes in utility are sometimes expressed in fictional units called utils (fictional in that there is no standard scale for them).

The doctrine of utilitarianism saw the maximization of utility as a moral criterion for the organization of society. According to utilitarians, such as Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1876), society should aim to maximize the total utility of individuals, aiming for "the greatest happiness for the greatest number of people". Another theory forwarded by John Rawls (1921-2002) would have society maximize the utility of the individual receiving the minimum amount of utility.

In neoclassical economics, rationality is precisely defined in terms of imputed utility-maximizing behavior under economic constraints. As a hypothetical behavioral measure, utility does not require attribution of mental states suggested by "happiness", "satisfaction", etc.

Utility can be applied by economists in such constructs as the indifference curve, which plots the combination of commodities that an individual or a society would accept to maintain a given level of satisfaction. Individual utility and social utility can be construed as the dependent variable of a utility function (such as an indifference curve map) and a social welfare function respectively. When coupled with production or commodity constraints, these functions can represent Pareto efficiency, such as illustrated by Edgeworth boxes in contract curves. Such efficiency is a central concept of welfare economics.