Question

How are good decisions different from bad decisions? How does subjective utility affect such judgements?

Answer 1

The primary difference between good and bad decision lie in the outcome. Good decisions help achieve the desired task outcome whereas bad decisions don't. Good decisions are what help remove the object of hurdle from the path whereas bad decisions sometimes end up adding more of the hurdles.

Subject utility is the satisfaction that derived from making a decision as it is personally made and aims to fulfill personal desires. The fulfillment of subjective utility can be good, but it can also be bad, as a person probably would over look the objective reasoning and fall in the trap of what works best for him/her, which can lead to faulty reasoning and hence bad decision. Self serving bias can also become a part of the process which can further worsen the decision making process.