Talk:Marginal utility/Archive 5

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Archive 5

Criticisms moved to proper position

First, apologies for not using whatever the correct format here might be. I've never used a Wikipedia talk page before. Regardless, the first two examples, particularly the first, don't seem to work very well.

"bed sheets, which up to some number may only provide warmth, but after that point may allow one to effect an escape by being tied together into a rope;" (This relies on a great deal of assumptions proving true, among them being there is be somewhere to store the extra sheets, something stable to tie them to, the sheets presently in use being somehow unfit for the same purpose, and the person in question having adequate enough knowledge of knots to tie knots that will bind the sheets together without them slipping loose as they are supporting the person's weight and dropping him or her to his or her injury and/or doom. In short, this example of increased utility is a little bit ridiculous. Perhaps it should simply state having spare sheets could prove useful if the temperature drops lower than is normal or, of course, if a guest spends the night.)

"tickets, for travel or theatre, where a second ticket might allow one to take a date on an otherwise uninteresting outing" (If the outing would prove uninteresting, the the first ticket provides no additional utility and the possible utility given by the second seems very uncertain, meaning a situation that gives negative utility might or might not actually provide some utility if one had a second ticket. Perhaps instead the situation can be: You have two tickets to a show/exhibit/whatever you have only mild interest in but your date, whose company you greatly enjoy, has been eagerly anticipating. In this situation the second ticket allows you to greatly increase your utility by bringing your date to what would otherwise be a mediocre evening.)

Just a suggestion.

-Anonymous contributor on March 12, 2010 7:30 AM (-6 UTC) —Preceding unsigned comment added by 75.57.181.33 (talk) 14:00, 12 March 2010 (UTC)

Why not continue the spirit of your criticisms by objecting to the presumption that it isn't social convention to dismember people found in possession of theater tickets, &c? Why not extend similar criticisms to the remaining examples — for example, it is presumed that the bacteria are pathogens, rather than symbiotes, that people don't want disease, &c?

This article is not on tipping points, and the purpose of these examples is not themselves to give an exacting statement of just when tipping points exists, but to quickly show the reader that the “law” of diminishing marginal utility isn't really a law of the same sort as, say, conservation of mass/energy. —SlamDiego_←T 21:24, 12 March 2010 (UTC)

There is no problem with tipping points, since all available bed sheets in case of an escape will have the same value (measure of utility) for an escapee. You can't secure an escape if you come short of any single one of your bed sheets, so there is neither increase nor decrease in marginal utility with an additional unit required for a flight. In fact, it is meaningless to speak about the law of diminishing marginal utility in all these cases (tickets, antibiotics, whatever) because they are distinctly out of scope of this law. Simply put, those who propose such examples as a proof of inconsistency of this law just don't understand what this law is actually about Deisik (talk) 20:30, 14 July 2011 (UTC)

I undid your recent changes. Frankly, I can't understand what you wrote there, so it needs at least re-phrasing. I imagine it would be best to work out that phrasing here on the talk page first. I also have a bit of trouble following what you say above. The material you replaced appears to be based on a sensible interpretation of the idea of diminishing marginal utility. If it's not, could you reference a source which demonstrates why not? CRETOG8(t/c) 17:07, 20 July 2011 (UTC)

See The Law of Marginal Utility chapter in Mises' Human Action — Preceding unsigned comment added by Deisik (talk • contribs) 19:31, 21 July 2011 (UTC)

Regarding the comment you mention my point is that once the person in question has all the bed sheets required for an escape there is no difference in utility between them. Up to this point there is no room for the law of marginal utility and it is Gossen's first law that is inconsistent here Deisik (talk) 20:04, 21 July 2011 (UTC)

marginal utility

The marginal utility of a consumer is directly related to its demand curve.Discuss —Preceding unsigned comment added by 41.155.22.128 (talk) 18:59, 24 August 2010 (UTC)

Misleading link to Measure (mathematics)

This page speaks of some theories of utility being 'quantified', meaning that these theories associate different levels of utility with different real numbers. That is not the same thing as saying that utility is a measure, in the sense of the mathematical field called 'measure theory'. In that theory, a measure is a very specific type of function that maps sets into real numbers and has several special properties. Saying that utilities are described by numbers, and can even be added, subtracted, and so forth is not the same as saying that the utility function is a measure. (When we calculate expected utility by adding or integrating utility with respect to a probability, this probability is a measure, but the utility function itself is not a measure.)

Therefore, as I argued some time ago, the link to Measure (mathematics) is misleading. That link should be eliminated, and therefore the term 'quantified' should be defined with different wording.

The following are the relevant (as far as I can tell) comments from this archived discussion. Rinconsoleao (talk) 15:28, 8 September 2010 (UTC)

I would appreciate it if you could clarify further. If U(x) is a neoclassical utility function (or a list of the numbers associated with a complete neoclassical ranking by order of preference), what is it a measure over? Are you asserting that it is a measure over the space of goods x? Or are you asserting that it is a measure over the space of 'utilities' u? Or are you asserting something else? --Rinconsoleao 09:54, 9 August 2007 (UTC)

Neoclassical economics defines a utility function as a mapping, with certain properties, over real numbers. It would be empty, in neoclassical economics, to call this a mapping over utilities, as utilities would be no more or less than that over which a utility function maps. —SlamDiego_←T 10:10, 9 August 2007 (UTC)

Fine. Now in what sense is that mapping a measure? --Rinconsoleao 10:42, 9 August 2007 (UTC)

Arithmetic performed upon it yields meaning full results. For example, as I stated elsewhere, the signs of differences are meaningful. That is why transformations must be at least monotonic (if not more rigidly restricted) to be accceptable, and why monotonic transformations are possible. I have already made these points. —SlamDiego_←T 10:47, 9 August 2007 (UTC)

OK, but if that's what you mean by measure, then it is not what is meant by measure in measure theory. Therefore, I would again suggest that we eliminate the link to measure theory, which will only confuse readers. A measure, in measure theory (as I assume you do know) is a function that maps sets to the real line, subject to certain regularity conditions. The main regularity condition is that the measure of the union of A and B is at least as large as the measure of A. One can perform meaningful arithmetic on functions which are not measures. --Rinconsoleao 11:07, 9 August 2007 (UTC)

'Utility' section

The section on 'utility' is well-written and makes some important philosophical distinctions, but I think it still needs improvement.

(1) The section mentions 'quantified' conceptions of utility, but fails to point out that there are two very different forms of quantification: 'cardinal' models of utility where the numerical value of utility is assumed to have some actual meaning in terms of intensity, and 'ordinal' models where the numerical value only indicates the position of a particular choice in a ranking of possible choices. Should mention both. Would also be helpful to mention that models of expected utility are implicitly assuming cardinality.

(2) The Austrian conception is mentioned as a non-quantified version of utility, saying that utility is conceived in terms of 'satisfaction of needs'. That's a good description, but may be unclear to someone who is not already familiar with the Austrian concept. It would be helpful to say a bit more to clarify this, mentioning rankings of possible uses of the goods consumed.

Alternatively, and probably better, we could add a section on 'Non-quantified marginal utility' to complement the section on 'Quantified marginal utility'. Rinconsoleao (talk) 14:21, 10 September 2010 (UTC)

Rinconsoleao is right. The term quantified is ambiguous. See this statement, for example: "quantifiable ... as if different levels of utility could be compared along a numerical scale". What does compared means? A meaningful comparison of the differences between two utility measures implies cardinal utility. Meaningful comparisons across numbers as in ratio scales is not even cardinal utility, is measurable utility (a concept a bit more primitive, see cardinal utility). And finally, there is ordinal utility theory, in which comparisons are not meaningful unless they use the ratios of the first derivatives of the posited utility index. --Forich (talk) 19:47, 10 September 2010 (UTC)

Thanks, this also seems helpful for addressing my comments in the previous section, on measure theory. I was unaware of the term measurable utility that is discussed on the cardinal utility page. Now I understand how the term 'measure' crept into the marginal utility page. But as far as I can tell, this is still unrelated to measure theory in the mathematical sense of the word. So do you agree that the linking to measure theory is inappropriate? Rinconsoleao (talk) 10:28, 13 September 2010 (UTC)

the measurability issue is relevant to the cardinal utility entry, but not so much for the marginal-utility one. I agree that the link is unnecessary. --Forich (talk) 14:01, 13 September 2010 (UTC)

(3) The penultimate paragraph makes the claim that an ordinal conception of utility 'doesn't depart from the concept of usefulness'. That's not an unreasonable claim, but it seems to be original research. The purpose of the statement seems to be to argue that all conceptions of marginal utility (not just the Austrian one) can be analyzed in the same terms, as long as we start from the notion of 'usefulness'. That philosophical claim might be true, but I have never heard it defended anywhere other than this Wikipedia page. Therefore I think it should be deleted, given Wikipedia's ban on original research. Otherwise a citation is needed, specifically defending that claim. Rinconsoleao (talk) 08:00, 10 September 2010 (UTC)

Confusing sentences

I find this sentence confusing:

Constraints are conceptualized as a border or margin.

As an informed reader, it seems to me that this sentence is trying to explain the meaning of the word 'marginal'. If I were uninformed about the topic, I would be asking myself 'conceptualized by whom?', or 'what for?' or 'what does conceptualized mean in this context?'

Also, the following sentence is misleading:

The location of the margin for any individual corresponds to his or her endowment, broadly conceived to include opportunities.

That's misleading because economists sometimes speak of the 'marginal utility' associated with consumption levels not corresponding to the endowment. For example, using standard neoclassical terminology, we might speak of a consumer with a smoothly differentiable utility function U(C), decreasing marginal utility, endowment equal to 10, and a bliss point at 5. Such a consumer would choose C=5 because marginal utility equals zero at that point. But in this example, we are discussing marginal utility at a point that does not correspond to the endowment.

These sentences should therefore be rewritten for greater accuracy and clarity. Rinconsoleao (talk) 10:44, 8 September 2010 (UTC)

"The concept of marginal utility played a crucial role in the marginal revolution of the late 19th century, and led to the replacement of the labor theory of value by neoclassical value theory in which the relative prices of goods and services are simultaneously determined by marginal rates of substitution in consumption and marginal rates of transformation in production, which are equal in economic equilibrium."

Where did the replacement take place? In the minds of economists?

I didn't write that bit, but yes, it refers to the replacement of the labor theory of value as the main theory of value accepted by mainstream economists.Rinconsoleao (talk) 19:11, 3 November 2010 (UTC)

Given that the article goes on to further point out that Marx wrote Das Kapital after the marginal revolution is thought to have begun, it seems odd to have the article begin with a sentence that gives a different impression. 198.204.141.208 (talk) 18:00, 3 November 2010 (UTC)

The labor theory of value far precedes Marx. It's the theory of value used by Ricardo (and Adam Smith, too, as far as I know). So the dates mentioned are perfectly compatible.Rinconsoleao (talk) 19:07, 3 November 2010 (UTC)