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/sci/ - Science & Math

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10529327 No.10529327 [Reply] [Original]

undergrad arguing with a grad student here in cs land. does money have diminishing marginal utility? grad student doesnt think so.

>> No.10529625

>>10529327
yes it does. grad student can't see it cuz he's poor as fuck and has been for as long as he can remember and will be for as long as he can foresee. once he has some, he'll complain about something else. such is life in capitalist USA

>> No.10529677

>>10529327
I'm not a huge fan of the idea of cardinal utility in the first place but I'd say that it does because diminishing marginal returns is pretty much a universal law

>> No.10529773

>>10529327
Since you can always exchange it for something that has utility for you at a rate that's independent of the amount you have, the only way it could have diminishing marginal utility is if you not only start to run out of things you can spend it on, but also don't get any utility from charity.

>> No.10529786

>>10529327
eh, your question isn't very good because it implies that you get utility from money itself when money is used to gain utility.

>> No.10529793

>>10529773
Having said that, I suppose your first $N that allow you to buy food, shelter, and medicine probably have higher utility than subsequent money, so that would be a decrease in marginal utility. But I don't think it continues to decrease from there, or levels off to nothing after the "optimum" $75k / year or whatever it is those studies say.

>> No.10530196

Ask him if he would rather a. Receive one million dollars with no conditions or b. Take a one in ten chance to receive 15 million dollars. I have asked this question many times and have never met someone who chose the latter.

>> No.10531828

>>10530196
That just measures risk aversion though

>> No.10531837

>>10529327
It absolutely does. Why else would rich people sit on piles of uninvested cash?

>> No.10531911
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10531911

>>10529327
Absolutely. The key is to properly understand the definition and context of "utility".
Yes, a dollar is a dollar, but a dollar has diminishing marginal usefulness _with respect to a given entity_. The reason is you can only consume but so much stuff in the real world

>> No.10531916

>>10529327
also, "grad student" means fuck all. i once had a grad student tell me the expected value of a six-sided die roll can't be 3.5 because "a die can't land on 3.5, you're trying to apply continuous probability concepts in a discrete system"