Generalized benefit functions and measurement of utility (Q706376)

The authors define a generalization of \textit{D. G. Luenberger}'s benefit function [J. Math. Econ. 21, No. 5, 461--481 (1992; Zbl 0766.90011)]. The definition depends on a given convex function; when this function is a norm the resulting generalized benefit function is called normed benefit function and assigns to a pair \((x,u)\) consisting of a bundle \(x\) and a utility level \(u\) the distance from \(x\) to the boundary of the set of commodities whose associated utility is at least \(u\). Computing the generalized benefit function involves the minimization of a convex function on the complement of a convex set. Using a duality result from \textit{B. Lemaire} [SIAM J. Optim. 8, No. 4, 1029--1037 (1998; Zbl 0914.90263)], a duality relationship between the generalized benefit function and the expenditure function is derived in the case when the utility function is quasiconcave and continuous. The authors also present some connections between the generalized benefit function with the Hicksian compensated demand function and the Slutsky matrix.