Sentences with phrase «utility maximization»
"Utility maximization" refers to the concept of making decisions or choices that bring you the most benefit or satisfaction. It means prioritizing and selecting options that provide the highest level of usefulness or well-being, based on your preferences and priorities. Full definition
This led to a conflict with academic economists who insisted the optimal strategy was derived from utility maximization.
alephblog.com
In delegating, the end investor does not mandate that the manager must evaluate securities based on the investor's utility maximization problem, and a natural alignment of the investor's and manager's interests is not present: managers are incentivized to outperform relative to a stated benchmark or to peers, rather than to operationalize the consumption model of the end investor.
For robustness, he considers several levels of investor risk aversion in determining utility maximization and other gaps between borrowing and lending rates.
These competing theories have led to two primary investing paradigms (active for utility maximization, passive for regret minimization).
Let's look at utility maximization first.
In situations of randomness, expected utility maximization is a standard decision - making framework.
The better the ranking produced by the metric aligns with the utility maximization ranking, the better the metric.