Article
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Preserved in Portico This version is not peer-reviewed
Utility Perception in System Dynamics Models
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Version 1
: Received: 30 July 2018 / Approved: 31 July 2018 / Online: 31 July 2018 (15:16:00 CEST)
A peer-reviewed article of this Preprint also exists.
Langarudi, S.P.; Bar-On, I. Utility Perception in System Dynamics Models. Systems 2018, 6, 37. Langarudi, S.P.; Bar-On, I. Utility Perception in System Dynamics Models. Systems 2018, 6, 37.
Abstract
Utility perceived by individuals is believed to be different from the utility experienced by that individual. System dynamicists implicitly categorize this phenomenon as a form of bounded rationality and traditionally employ a simple smoothing function to capture it. We challenge this generalization by testing it against an alternative formulation of utility perception that is suggested by modern theories of behavioral economics. In particular, the traditional smoothing formulation is compared with the peak-end rule in a simple theoretical model as well as in a medium-size model of electronic health record implementation. Experimentation with the models reveals that the way utility perception is formulated is important and might affect behavior and policy implications of system dynamics models.
Keywords
utility; peak-end rule; smoothing; perception; system dynamics
Subject
Social Sciences, Cognitive Science
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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