Introduction
In economics, the utility is a form of measurement used to determine the level of satisfaction an individual gets from consuming of a certain good/service. Human behavior, on the other hand, is the theory that defines the nature of human beings in maximizing utility acquired from consumption, while minimizing the cost to be incurred to get the good or service desired.
“Bentham, the father of utilitarian concludes that economics and nature have ‘placed humanity’ under the governance of two masters; pain, and pleasure” (Herrnstein, 1990, p. 40). Economics seeks to satisfy this pleasure and minimize the pain involved.
Relationship between Utility and Human Behavior
Human beings have very diverse needs that vary from one consumer to another. The rationality of choice comes into play once there are resources to meet some or all of these needs. Nowadays, the market is flooded with several brands of the same product. All these products carry with them a certain level of utility and vary in price and quality. This is where the market experiences consumer diversity better, as some tend to go for quality, while others prefer quantity to the price on offer.
The rational choice theory
Contrary to the main topic, sociologists and psychologists are responsible for bringing to light the relational choice theory; also, the choice theory. It is a theory indicating that the consumer, being a rational being, will seek to get the best out of all the products available, and at the least price possible.
Therefore, utility can either be exactly as expected or more. Other than just the price, quality and quantity, the product in question has to have a high level of social respect associated with it. This market recognition narrows the consumers’ attention from the wide spectrum of the same product type on the shelf.
Measurement of Utility
Utility is an invisible factor in economists. For this reason, it created quite a stir within the economists during its introduction, prompting the use of other factors to monitor it. When heading for a certain product in the market, the consumer ought to be ready to part with some money to acquire that good, or enjoy a certain service.
Market instruments also determine this amount, in that the manufacturer of the product and those offering the services in question also require a certain amount of money in order to stay in business. Relationship between these two then determines the value of utility gained from consuming a certain good, compared to another of the same aspect.
Behavioral economics
Human behavior is the backbone of microeconomics. It determines its existence. This discovery was so crucial in the study of the elements of microeconomics that it prompted the introduction of behavioral economics.
From this, it there is an understanding that the consumer is self-centered; he/she does not take into consideration the status of the market when making a choice; only the attainability of the required satisfaction, considering the number of resources available at the time. Contrary to the consumer, the producer maximizes on profitability through maximization of returns on a fixed quantity of inputs.
Conclusion
According to studies in human behavior, the utility is always on an upward trend with every consumer. The level acquired today is not the same as that expected of the product on the following day; this has led to quality control as manufacturers brawl for market dominance.
References
Herrnstein R. J. (1990). Behavior, Reinforcement and Utility. Psychological Science, (pp. 1).