Logical Decisions - Classweb

Figure 9-2. Example of linear (straight line) SUF.
Non-Linear SUFs. Straight line SUFs can't describe many
common preferences. For example, suppose that in our truck
example you feel that you want a powerful truck, but that after a
certain level the usefulness of additional horsepower begins to
drop off.
Suppose there is a range of from, say, 80 to 180 horsepower in the
trucks you are comparing. You might feel that an increase from
80 to 90 hp was much more important than an increase from 170
to 180 even though the increase is 10 hp in both cases. To capture
these preferences you must make the utility change from 80 to 90
HP greater than the change from 170 to 180.
The idea that the increase in desirability per unit decreases with
increasing levels is related to the idea from economics of
decreasing marginal returns, although here we are talking about
decreasing returns of utils rather than dollars. The idea is also
related to the decision analysis concept of risk aversion.
Assessing SUFs. The process of establishing the proper shape for
the SUF for each measure is called SUF assessment. Since there is
Section 9 -- In Depth 9-15