Quasilinear utility

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In economics and consumer theory, quasilinear utility functions are linear in one argument, generally the numeraire. Formally, for example, such a utility function could be written $U (x, y) = u (x) + b y$ , where $b$ is a positive constant. Then if $u'(x) > 0$ and $u''(x) < 0$ , the indifference curves are parallel. Because in standard consumer theory utility functions are ordinal, one may assume without loss of generality that $b = 1$ .

Informally, an agent has quasilinear utility if it can express all its preferences in terms of money and the amount of money it has doesn't affect this utility. As a practical matter in mechanism design, quasilinear utility ensures that agents can compensate each other with side payments.