Utility and Satisfaction
Categories: Metrics, Company Management, Accounting
When you buy a good or service, you get some amount of use out of it. The total satisfaction from buying said good or service is your utility. The utility of things affects the demand for those things, and therefore also the prices. In general, people use perceived future utility to determine whether or not to buy something. This imagined utility differs from actual satisfaction after the product or service is bought.
Say you’re thinking of buying a cornballer, and you think your utility for this cornballer in your life will be very high compared to the cornballer cost. Totally worth it, you think. Then you buy it, only to find that each time you use it, you get severe burns on your hand, and occasionally your face. Your satisfaction with the product is not only low, it’s negative. This is why cornballers are no longer on the market, sadly.
