Instant utility approach to the social sciences

Deeper theory opens new vistas, and economics may now justifiably advance to a more essential paradigm. The basis for this deeper theory is empirical instant utility (feeling state, Dolan [2002])—the time derivative of utility (satisfaction). Immediate benefits include: reconciling sociology and economics (both could now agree that wants, desires, satisfactions, etc. are endogenous); a more substantive modeling of time and (periodic) human activity in microeconomics; and the analytic formulation of bounded rationality, including expected risk. Because socioeconomic theory is now derived from deeper instant utility theory, the several branches may be unified in an overarching classification. As a demonstration, Real Business Cycle Theory and Equilibrium Theory are connected or related by a set of assumptions based on instant-utility theory (the Gossen Equation). Then, after presenting a mathematical formulation of instant-utility theory, Ramsey’s rule for saving (1928) is extended to account for autonomic-discounting and expected-risk discounting. The prospect for greater cooperation between sociology and economics is addressed. Reference is given to a recent (2011) unification of Gossenian (instant utility) theory with neoclassical economics. …It may be emphasized that much of the important and far-reaching progress in economics and social psychology over the past 100+ years is naturally accommodated by the instant-utility theory. This progress includes rationality, diminishing marginal rates of substitution, the theory of the firm in economics; and social-identity theory in social psychology. Furthermore the historical bases for finite interest rates—time preference, better times ahead, shortness of life, increasing technological knowledge, diminishing vitality in later years, and risk—may be substantively formulated.