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I have got 'round to looking back at this article after being away from it for a while, and the lede is back to insinuating intrinsic quantification into the definition. I plan to fix this at some point in the foreseeable future. — SlamDiego ←T 07:41, 10 December 2007 (UTC)
The introduction is way too complex to explain what marginal utility. Marginal utility is easiest defined against Total Utility rather than using an vague sentence that makes almost no sense. 86.143.19.22 ( talk) 11:13, 31 January 2008 (UTC)
“ | a preliminary thing, such as an explanatory section at the beginning of a book. | ” |
“ | adjective preceding or done in preparation for something fuller or more important. ORIGIN -- Latin praeliminaris, from prae ‘before’ + limen ‘threshold’. |
” |
BTW, here's a really easy conception of marginal utility for the typical reader to grasp:
That's not only a bona fide conception, it's basically the one with which Jevons was working. (Bear in mind that he inheritted his notion of utility from John Stuart Mill.) Yet I haven't seen anyone suggesting that the lede begin with this narrow, easy conception. Instead, there is the attempt to have the lede begin with the present neoclassical conception, in which the earlier neoclassical relationship has been stood on its head (so that cardinal “utility” proxies preferences). So far, no one is arguing for starting with that far easier early British idea, and I'd be surprised if anyone seriously did, because easiness isn't a G_d to which to make such sacrifices. — SlamDiego ←T 21:55, 4 February 2008 (UTC)
Thank you, Slam. Your new introductory sentence vastly improves the readability of the definition you offer. I think it should be accessible to the typical reader. -- Rinconsoleao ( talk) 09:08, 8 February 2008 (UTC)
I'm a random user who has very little economic background. I really want to understand marginal utility and its implications without taking an entire college course on economics. I'm by no means unintelligent or uneducated, but I still can't understand this concept based on the wiki. Could somebody explain it in plain english here, and then maybe it can be worked into an understandable article? I feel that there's too much economic jargon, even if it seems simple enough to someone well-versed in economics. 74.46.62.234 ( talk) 11:48, 17 April 2009 (UTC)
I'm still confused by the definition (first sentence). The second sentence doesn't help either. I'm also confused by the word "agent". Who is the agent? Perhaps it would dumb things down too much, but an example would help a lot. I will note that IMHO, this article is vastly more understandable, much more understandable with a good example: http://www.investopedia.com/university/economics/economics5.asp Clemwang ( talk) 18:41, 23 December 2009 (UTC)
The article is of mighty nice quality. However I think it looks a little bit boring, I believe an appropiate image or two would redeem this. Any opinions? Lord Metroid ( talk) 19:58, 21 February 2008 (UTC)
It might not be transparent why I have altered the claim that diminishing marginal utility is equivalent to risk aversion, to a claim that it implies risk aversion.
I am used to discourse in which “risk aversion” is a name (rather than a description), in which case indeed diminishing marginal utility is equivalent to risk aversion, but the present form of the article “ Risk aversion” treats “risk aversion” as a description. Diminishing marginal utility is then only equivalent to risk aversion under the assumption that utility is linear in the probabilities. — SlamDiego ←T 21:27, 7 March 2008 (UTC)
The Marginal Revolution and Marxism
"In his critique of political economy, Marx discussed “use-value”, a concept analogous to utility:
A use-value has value only in use, and is realized only in the process of consumption. One and the same use-value can be used in various ways. But the extent of its possible application is limited by its existence as an object with distinct properties. It is, moreover, determined not only qualitatively but also quantitatively. Different use-values have different measures appropriate to their physical characteristics; for example, a bushel of wheat, a quire of paper, a yard of linen.[35]
He acknowledged that the value of a commodity is dependent on the use that can be garnered from it,[36] but, in his analysis, utility was considered as all or nothing; it was unnecessary to describe variable use-value; to Marx labor was the ultimate source of value."
I fail to see how Marx is saying use value is all or none in the above. That sounds like something you have read into it. Indeed the statement "One and the same use-value can be used in various ways." implies relative utility, which may or may not be subject to diminishing returns. —Preceding unsigned comment added by Extropian13 ( talk • contribs)
This passage:
"Marginalists explain that costs of production may be what limit supply, but that these costs of production are themselves sacrificed marginal uses, and will not be borne when they are expected to exceed the marginal use of what is produced. In other words, the marginalist certainly does not explain price as a simple function of the marginal utility of a single good for one person or for some “average” person, but nonetheless insists that it results from the trade-offs that each participant would be willing to make for the various goods and services at stake, with those trade-offs being determined by marginal uses. The critics who believe that costs of production determine price, by assuming a demand that will bear the cost, have begged the essential question that the marginalists purport to answer."
Constitutes both circular reasoning, and Original Research. No source is given for the above. —Preceding unsigned comment added by Extropian13 ( talk • contribs) 23:16, 8 June 2008 (UTC)
I made a good counter argument on how the creation of artificial diamonds would lower prices, and thus vindicate the labor theory of value determined by the cost of production. This argument was deleted from the criticisms section with no reason given. —Preceding unsigned comment added by Extropian13 ( talk • contribs) 23:09, 8 June 2008 (UTC)
Also the above argument is not "Original Research" and thus violates no policy. It is based on another wiki article: http://en.wikipedia.org/wiki/Synthetic_diamond which itself has numerous references at the bottom. —Preceding unsigned comment added by Extropian13 ( talk • contribs) 23:14, 8 June 2008 (UTC)
Actually since the concept of marginal utility is completely subjective, even by your own admittance, I would say it has a lot more in common with creationism then my empirical argument.
Second, you are arguing that the creation of artificial diamonds does not refute the concept of marginal utility, but if so, what other conclusion can we come to? The very concept of marginal utility is rooted in the demand for diamonds, not supply. Simply put, the first is more valuable then the second for, as you said "subjective" reasons. Now you are saying even if we can make it so the first has a lower value, and value stays relatively consistent in the market place, we can still presume the price is determined by marginal utility. So basically whether diamonds raise, or lower in value as labor to procure them is increased or decreased- no matter what- this is evidence of marginal utility. To me that sounds like an ad hoc excuse which bares the concept from being empirically testable from the onset. —Preceding unsigned comment added by 72.220.23.229 ( talk) 16:32, 12 August 2009 (UTC)
Google Search Rank | URL | Quote |
---|---|---|
1st | http://www.bun.kyoto-u.ac.jp/phisci/Gallery/D.bernoulli_note.html | Daniel thought that the value of any amout of money is determined relative to one's whole wealth ... This makes y a logarithmic functin of x |
2nd | http://plato.stanford.edu/entries/paradox-stpetersburg/ | He went on to suggest that a realistic measure of the utility of money might be given by the logarithm of the money amount |
3rd | http://cepa.newschool.edu/het/essays/uncert/bernoulhyp.htm | Bernoulli originally used a logarithmic function |
4th | http://c2.com/cgi/wiki?MarginalUtility | Let U(m) be the utility (i.e. the desirability) of an amount of money ... U(.) is a slowly increasing function, and roughly logarithmic |
This string of edits result in presumption that utility must be quantified for there to be a violation of the “law” of diminishing marginal utility, or at least that it must be quantified for marginal utility to be in any sense increasing. That's simply not the case; the only thing required for diminishing marginal utility is that
where is the best possible use of the unit of the good or service. The only thing required for increasing marginal utility is that
And the examples presented do not require quantification to be explained or even in themselves imply quantification. (And if they had implied quantification, then the exposition should have exhibited the quantification if it were labelling the utility “cardinal”.) — SlamDiego ←T 14:37, 1 September 2008 (UTC)
Aaquilino's reference to McConnell is ill-considered. Nowhere in McConnell is there a proof or even a claim that diminishing marginal utility is insufficient for convexity of indifference curves. (Discussion is in the appendix to Chapter 21.) Again, the claim of insufficiency is “original research”, and it is quite in error. — SlamDiego ←T 18:40, 17 October 2008 (UTC)
(Not in McConnell's text, but elsewhere, I have found authors claiming that diminishing marginal utility is not sufficient, but this claim is based on a notion of “diminishing marginal utility” such that is said to be “diminishing” when it is not, in fact, diminsihing. More specifically, it is said to be “diminishing” when it would diminish were it not for interaction with the other good. There is a distinction between utility obeying the “law” of diminishing marginal utility and utility diminsihing more generally. This issue was meant to be picked-up by the “all else being equal” earlier in the article; I have added a parenthetical note on complementarity of uses to make matters more explicit.) — SlamDiego ←T 10:24, 18 October 2008 (UTC)
The deeper issue is this: marginal utility theorists were aware, before Hicks and Allen, that complementarity could throw a wrench in the works. So they assume an absence of significant complementarity as typical. Hicks and Allen just more baldly assume that indifference curves are convex. In other words, the marginal utility theorists assumed-away one thing which would lead to non-convex indifference curves, while Hicks and Allen just assumed-away the non-convexity. The fact that marginal utility theory needs the one assumption, whereas Hicks and Allen make the other, doesn't show that the former is somehow incorrect or that the latter is somehow more advanced. — SlamDiego ←T 22:21, 18 October 2008 (UTC)
McConnell does provide a fine illustration of a mainstream economists who bobbles marginal utility theory and thus thinks that it is old-fashioned and ultimately incorrect. McConnell represents indifference curve analysis as “A more advanced explanation of consumer behavior and equilibrium”. He proceeds to this comparision from the presumption, explicitly given in the Appendix to Chapter 21, in a section entitled “The Measurement of Utility”, that
The marginal utility theory assumes that utility is numerically measurable, that is, that the consumer can say how much extra utility he or she derives from each extra unit of A or B.
That's simply wrong on two counts.
First, as has been repeatedly labored on this talk page, the general theory of marginal utility does not assume that marginal utility is numerically measurable.
Second the assertions
are not equivalent. That's a matter of simple logic. As many or most readers of this talk page will know, when there is an assumption of numeric measurability,
— SlamDiego ←T 18:40, 17 October 2008 (UTC)
Hello,
I just thought I'd point out that the while the Marginal Revolution may not have been a direct response to Marx himself, some scholars suggest that it was a reaction to workers movements and socialist movements who were inspired by the Ricardian labor theory of value long before Marx arrived on the scene. As Ronald Meek points out in "Studies in the Labor Theory of Value", there were many "radical economists" before Marx that picked up on the classical LTV to agitate on behalf of workers (121). —Preceding unsigned comment added by 76.171.216.108 ( talk) 16:32, 21 November 2008 (UTC)
The “History” section is about the history of the development of the idea of marginal utility, and presents its material in historical order. The subsection “The Marginal Revolution and Marxism” is concerned with the historical significance of Marxism for the development and adoption of the idea of marginal utility, not for Marxist pot-shots from just any era. A criticism from a 1977 book plainly played no rôle during the Marginal Revolution.
As to the quotation from Mattick, with the first sentence untruncated, it is
It was not long until the entire theory of marginal utility was abandoned, since it obviously rested on circular reasoning. Although it tried to explain prices, prices were necessary to explain marginal utility.
The truncation both changes the meaning of the sentence and represents an attempt at “synthesis”. Mattick's original claim is written with a reckless disregard for the truth; one can read “A Reconsideration of the Theory of Value” and Value and Capital (by Hicks and Allen, whose work displaced marginal utility) for the actual reasons that the notion of marginal utility fell from favor, and these reasons are summarized in the subsection “Eclipse”: the mainstream didn't see circular reasoning; they saw an unnecessary assumption of some underlying quantity.
Nor was there any circle, perceived or actual, in the relationship between the explanation of prices and of marginal utility. Lots of systems exist with feedback, and explanation that acknowledge and describe feedback aren't ipso facto examples of circular reasoning.
This criticism would quite fit amongst the Marxist attacks in the “Criticism” section of “Marginalism”, insofar as that screed-of-a-subsection generally serves to make Marxists look bad by a failure of some Marxists to comprehend the structure of marginalist theory. — SlamDiego ←T 11:29, 25 January 2009 (UTC)
There are problems with putting the paradox of water and diamonds in the lede section.
First, the paradox is not really one of two peculiar goods; but, without a background, many readers are going to take it as such, as if the whole point was to resolve a strangeness just about water and diamonds.
Second, even if it is made clear that this paradox exists across multiple pairings of types of gooda and of services, there is still the impression given that the principal use of the marginal utility concept is to resolve a paradox. But, while the paradox served to draw attention, the concept could have been developed without it. Indeed, Cramer and Bernoulli didn't reference that paradox at all when they made their explicit introductions of the concept, which predate those by Lloyd, Senior, &alli; the lede section could as much or more reasonably declare that “The ‘law’ of diminishing marginal utility can explain the ‘ St. Petersburg paradox’” — that paradox which provoked Cramer and Bernoulli. But the concept could have been developed without consideration of either paradox, and carries a lot more water than resolving a paradox or two. — SlamDiego ←T 10:09, 27 January 2009 (UTC)
Edit 267902796 is wrong on two counts. First, the marginal utility of one good or service is not immediately associated with a change in the quantity of any good or service, but with a change in that good or service. Second, the word “either” makes a disjunction exclusive, but there really isn't a clear distinction between goods and services. Ultimately, we want goods exactly for the service that they provide. — SlamDiego ←T 23:20, 1 February 2009 (UTC)
Since no one has nominated this article, I think I will. According to Wikipedia, the criteron for knowing if an article is GA is: (the article is) Useful to nearly all readers, with no obvious problems; approaching (although not equalling) the quality of a professional encyclopedia. -- Forich ( talk) 17:08, 15 February 2009 (UTC)
The problem with the water example is that it doesn't go to show that there is less value assigned to each additional water and so doesn't explain the most common scenario of the law of diminishing marginal utility as succinctly described by http://wiki.answers.com/Q/Law_of_diminishing_marginal_utility
The problem with the example is that the use of the water changes. So rather than have e1, e2, e3 (the value of the same substance water which we'd like to compare). We are really comparing uses of water, a, b and c, and the assigned relationships between them i.e. human>dog>plant. What makes this more confusing for readers is that although the dependencies between these uses are described in reality they are more complex (this is mentioned that it might be that plant>dog>human) but there might be arguments such as, why not give half the water to yourself and the second half to the dog. Obviously this seeks to alter the scenario, but ideally the hypothetical scenario chosen should not offer too many real world distractions for readers.
My biggest problem with the example is that it doesn't actually prove that diminishing marginal utility is taking place. I could claim that when you receive two waters, that actually the utility of the second water equals the first! But since the example is set up in terms of matching and you don't have the opportunity to give the 2nd water to yourself again, you can't actually demonstrate that there is less utility in it. There may indeed be the same utility in that water, but because in this hypothetical world to avoid waste the only next best thing you can do is give it to the dog, then that is what you do. Even if the example was modified to allow for the possiblity of giving the water to yourself, it wouldn't demonstrate DMU is taking place.
Can we come up with a better example please?! As it stands, I don't think this should be nominated as a good article. Even mangos with theoretical utility would be better as in wiki.answers.com. Obviously if we can find one that makes a natural comparison and is easier to understand that would be best. -- Dmg46664 ( talk) 15:30, 11 May 2009 (UTC)
A pioneer farmer had five sacks of grain, with no way of selling them or buying more. He had five possible uses: as basic feed for himself, food to build strength, food for his chickens for dietary variation, an ingredient for making whisky and feed for his parrots to amuse him. Then the farmer lost one sack of grain. Instead of reducing every activity by a fifth, the farmer simply starved the parrots as they were of less utility than the other four uses; in other words they were on the margin. And it is on the margin, and not with a view to the big picture, that we make economic decisions. [1]
Bkwillwm effected two changes.
The first of these, insertion of “{{main|Diminishing marginal utility}}”, created a loop-de-loop, as “ Diminishing marginal utility” is just a redirect back to that very section of the article.
The second, removal of
(The diminishing of utility should not necessarily be taken to be itself an arithmetic subtraction. It may be no more than a purely ordinal change.)
is apparently supposed to be motivated by the edit summary: “This is the Austrian view of utility, which is already in the article. We don't need to qualify use of the word utility.”
The isssue that the removed section addresses is not whether marginal utility is necessarily quantitative, but whether marginal utility can diminish wihout being quantitative. The talk history of this article and discussions elsewhere have repeatedly shown that some people (including some holders of economics degrees) often think that at least a weak quantification must hold for marginal utility to be meaningfully diminishing. (Indeed, look at the objection which began the immediately previous discussion here.)
As to the relationship of the Austrian School, the mainstream notion of ordinal utility is indeed weakly quantified, based on the presumption that any rational preference ordering can be fit to some quantifications, but that none of the quantifications to which it can be fit is uniquely meaningful. It remained for J.H. McCulloch to shown (by adapting mathematical work from probability theory) that some rational preference orderings could not be it to any quantification, but that the Austrian School notion of utility, of marginal utility, and of dminishing utility remained coherent. This article doesn't need to shout “Rah! Rah! Austrian School!”, but it needs to present the subject of marginal utility at full generality. The possibility of an assumption of quantification is repeatedly noted as relevant, but it needs to be distinguished from the underlying concepts of utility, of marginal utility, and of diminishing marginal utility. — SlamDiego ←T 12:59, 12 May 2009 (UTC)
Is the goal to describe what experts know, or to educate the general public? These are two completely different things. (It seems to me, the goal must be clearly resolved and authors must be willing to pay the costs of that choice.)
For example the short section on Marginality seems to do the former, but not the latter. The reason why it makes sense to the expert is because he already has examples in his head. But to the general public without those anchors, almost any of those sentences can have many meanings. Compound all those possible paths as sentence is added to sentence, and one quickly lands in confusion and chaos.
One possible remedy for this is to add examples. (Or when complex, perhaps several varied examples.)
One cost of adding examples is adding bulk. This implies cuts elsewhere may have to be made in the name of best reaching the over all goal. However, would not the general public find many of these subcategories rather rare and arcane? An encyclopedia article should not attempt to outline a semester.
I am often disappointed in Wiki's technical articles that have not subjected themselves to this discipline, and seem to be written for the pleasure of the authors, ("See MY education!") rather than to educate the general public. —Preceding unsigned comment added by 68.127.88.207 ( talk) 20:01, 18 July 2009 (UTC)
After extensive discussion, SlamDiego agreed to make some simplifications to the introduction, but other users still argue that the introduction is inappropriate: [2]. Another user recently made a long, substantive argument about why this article needs to be simplified, but SlamDiego considered parts of his argument offensive and therefore insisted that they be deleted. I will restore parts of those arguments below, trying hard to avoid parts that might be construed as personal attacks.
But before I do that, here is my main point. SlamDiego has tried to write an introduction that is fully accurate that deals with (what he considers) a fully general treatment of the concept. Readers have repeatedly complained that his introduction is incomprehensible.
I would instead suggest writing an introduction that is not fully general. An introduction can be entirely accurate, without being entirely general, as long as it makes entirely clear that it is simplifying by discussing a special case. Greater generality can be (and should be) achieved later on in the article.
Of course, what is 'simplest' is in the ear of the beholder. Most of those who complained about this article have instead suggested definitions that involve 'quantified' notions of utility, which SlamDiego has argued is not necessarily the simplest way of presenting the concept. But given the long history of challenges to this article, I would strongly favor changing to an introduction other users would find simpler.
Previously deleted comments of the other editor, arguing in favor of starting with a more elementary introduction, are shown below. They come from the section 'Whats the goal of this article'. I have edited out a few sections that might be construed as personal attacks. -- Rinconsoleao ( talk) 10:28, 23 July 2009 (UTC)
Google; "define: Marginal utility"
Definitions of Marginal utility on the Web:
- (economics) the amount that utility increases with an increase of one unit of an economic good or service
http://wordnetweb.princeton.edu/perl/webwn?s=marginal%20utility
- The additional utility to a consumer from an additional unit of an economic good
http://en.wiktionary.org/wiki/marginal_utility
- In a utility function, the increase in utility associated with a one-unit increase in consumption of one good; or the partial derivative of the utility function.
(The preceding sections were re-inserted by -- Rinconsoleao ( talk) 10:35, 23 July 2009 (UTC).)
The lead should be able to stand alone as a concise overview of the article.
Good, now we are making progress and addressing the structure of the article. I see no problem at all in sticking to the Wikipedia principles displayed above-- one can easily begin with a special case and generalize it in much less than four paragraphs in a way that allows the lead to stand in for the whole article.-- Rinconsoleao ( talk) 12:13, 23 July 2009 (UTC)
As for the definitions offered by Doug, every single criticism offered by SlamDiego is a criticism about their generality. In other words, each definition is correct if applied in the context of a particular way of thinking about utility and/or a specific way of counting changes in use. They are only incorrect insofar as they fail to deal with more general frameworks of analysis. Therefore, I think any one of those definitions, with small changes perhaps, would be an adequate introductory sentence for the article, as long as the article immediately makes clear that they are not fully general. -- Rinconsoleao ( talk) 12:18, 23 July 2009 (UTC)
The first paragraph of the introductory text needs to unambiguously define the topic for the reader.
SlamDiego bases his objection to an introduction most readers would find simpler on claims that the proposed alternatives are not fully general.
However, it seems unlikely that the definition offered here is in fact fully general. None of the references I have seen show exactly how the theory of Marginal use on which SlamDiego bases his supposedly general definition can deal in full generality with issues of time and probability.
For example, standard 20th century general equilibrium theory deals with contingent goods, like 'a bushel of wheat delivered in Chicago at noon on June 20, 2001, if it is raining at that time'. What exactly is meant by the 'use' of such a good? Standard general equilibrium theory need not ask this question, because its definitions of utility do not go by way of a definition of uses; instead, utility is defined as a partial ordering of bundles of goods. Has the Austrian theory of Marginal use answered questions like these? Not in the references I have seen. If it has not, then the definition offered in this article is not general and therefore has no claim to priority over other definitions that are also correct within their own limited theoretical contexts. -- Rinconsoleao ( talk) 13:47, 23 July 2009 (UTC)
An editor, who signed as 'Doug' but did not give his Wiki user name, made some comments on this page which seemed to me very useful. User SlamDiego deleted them, interpreting them as a personal attack. I have tried to restore them, but SlamDiego deleted them again. I have tried to point out to him that the language he specifically interpreted as a personal attack does not, to me, seem like a personal attack. I would ask SlamDiego, please, to restore those comments (feel free to delete specific bits that you interpret as a personal attack); otherwise I would ask other editors to restore them.
My main concern about this page, like that of many others who have criticized it, is that it fails to introduce the material in an accessible way. I believe that can be done, with no lack of accuracy, as long as we make clear that simple definitions based on 'quantifications' of utility are not a fully general treatment of the concept. SlamDiego made some progress on clarifying the introduction in response to my previous comments (above), but I think, and other readers agree, that the page still fails to achieve sufficient clarity. -- Rinconsoleao ( talk) 08:05, 23 July 2009 (UTC)
What is the purpose of communication? I would suggest the more people than can correctly understand the message the more successful the communication would seem to be. As an economics student I've found that in relation to textbooks the less accomplished is an author the more complicated is the language in the text (regardless of the subject matter), the explanation seems to be related to an intellectual form of "small man syndrome", the same could be said about Wiki articles. —Preceding unsigned comment added by 220.253.93.55 ( talk) 00:53, 28 August 2010 (UTC)
This section does not prove for the claim that self-interest is not occurring in a scenario where the individual is making a choice to create greater value for someone else, particularly when it describes actions which are clearly volitional in nature, therefore based on conscious choices. There are at least two reasons why this is problematic:
1. Example: A mother may place greater priority over the life of her child, but to choose such a decision is still based on a set of self-interest based priorities (and arguably so, which goes to the second problem...)
2. Value is subjective to the individual, which is at best an empirical but informative enough point from which to establish economic theory or law.
Insomuch that an individual could act outside of self-interest, this does more to question whether such an agent can be perceived as possessing an ethical/moral capacity in order to be characterized as a volitional entity in the first place.
There is reason to argue against presumptions of objectively determined value as they contradict the purpose of economic study altogether (sans fictional constructs meant to inform readers), but to claim that self-interest is not present when discussing volitional actions runs counter to what the sphere of economic study is about.
If you want to ascribe motives to storms and tides, this is not the place to do so. —Preceding unsigned comment added by 75.69.194.194 ( talk) 04:04, 7 August 2009 (UTC)
Your edit to “Marginal utility” replaced a general definition with one particular conception, and was therefore wrong. For example, as the article itself notes, the mainstream of economic theory does not define “utility” in terms of satisfaction; rather, “utility” is defined as a quantified proxy of preference. (Introductory undergraduate courses often punt to something like the original conception of the British marginalists, because it's easier to teach and because few economists are in fact really familiar with topic more generally. But “ Wikipedia is an encyclopedic reference, not a textbook. The purpose of Wikipedia is to present facts, not to teach subject matter.”) And marginal changes are not simply any potential or actual increases, but also decreases. — SlamDiego ←T 18:09, 6 January 2010 (UTC)
Your unnecessarily dense wording, including the "quantified proxy of preference,"
by "dense," I was referring to the current wording of the lead, not anything you posted on some talk page
It appears I've stepped into the middle of an ongoing discussion. A suggestion, if agreement cannot be reached, please leave a note at the Wikiproject Economics talk page, for help to reach a resolution. LK ( talk) 04:53, 7 January 2010 (UTC)
I've read the history of the article, and it strikes me that so many editors (most of them with good achievements in Wikipedia) can't agree on such a known subject in economics. I hope that we can bring this to Good article nomination (as soon as the edit wars stop). Here is my modest take on reviewing the body of the article. By the way, I am a neoclassical orthodox economist with a little knowledge of the Austrian view (basically, I read and studied the McCulloch 1977 article that is cited in the history of this talk page).
I have no complaint on this section. It is clear and accurate. Orthodox theory do consider marginal changes to be inifinitesimal.
Under orthodox theory, it is not necessary to give different uses to the marginal change of a good or service, so this paragraph may be revised to be more general. In fact, I believe that the word diminishing was first used to reflect the fact that: i) there was a psychologycal saturation after consuming the marginal change, and ii) there was an arithmetical change that was negative in the cardinal utility of the individual. Later, when the discipline moved towards ordinality, the term diminishing lost any psychological interpretation (an equivalent utility function could give you now a positive second derivative) but instead got clouded under several assumptions about satiability, convexity, and etc (what us orthodox call primitives). I think that when people in the early 20th century refer to a diminishing marginal utility they meant the british or marshallian approach (the one where it doesn't matter what ordering you give to potential uses), even though Menger had a lot of notability with his examples of farmers giving different ordered uses to goods (only that mainstream textbooks just said: hey, Menger did the same as Marshall, except that he used non-mathematical examples).
This argument is supported with references from 1968 and 1977 (wich are reliable, no doubt), but I think they push some Point of View (POV). Here is the semantic trouble as I see it: Austrian had an excellent and original definition of hierarchical-uses-of-descending-importance which McCullochs' article calls diminishing marginal utility, BUT this was in 1977 and so it conflicts with the orthodox definition that got into mainstream since Marshall years (c.1890). So we have a case where a better theory borrowed the term diminishing marginal utility when they actually refer to hierarchical-uses-of-descending-importance. The keyword is diminishing: utility (orthodox utility) actually diminishes (as in going from 10 utils to 9 utils), whereas uses (austrian uses) just descend in the scale of importance, so no quantity is diminishing here. The problem is semantic, because it's not, strictly speaking, the same concept. Later in his article, McCulloch explains that, as an extension to the formalization he is providing, a numerical index can also be attached to the austrian approach (even though it is not necessary for it to work).
I agree with this one. Self interest enters orthodox microeconomics only to the extent that people make choices based on the maximization of their own utility functions, there is nothing in the "primitives" or assumptions-preference-orders that explicitelly mandates people to be egotistic.
Finally, the history section is what I like the most. It is well balanced, rich in facts, neutral POV, and well written and illustrated. So, in conclusion, I think that the article is excelent in its current state, except that for some parts of it, marginal utility needs to be divided into two: there is a british marginal utility, and an austrian marginal utility, and they are not strictly the same concept. Unfortunately, to label the former two in a different way would be original research. I don't agree with the view of the main editor who says that general = austrian and specific = orthodox (a view that ultimately reflect on the discussion over the lead): the article is about a not-so-good theory (the british one, let's admit it) that has taken for its own the concept of marginal utility, on the other hand, the austrians have a good theory that is not based on the exact same concept. In other words, history has given prominence to the marginal utility of the british, but many years later, austrian realized that they had: i) polished the concept of marginal use that magically wraps everything together; and ii) formalized their ideas in a way that made everithing quantifiable and thus, more comparable to the british-orthodoxy, and now the two things are making its definition a mess.-- Forich ( talk) 01:52, 15 January 2010 (UTC)
Under the mainstream assumptions, the marginal utility of a good or service is the posited quantified change in utility obtained by increasing or decreasing use of that good or service.
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I have got 'round to looking back at this article after being away from it for a while, and the lede is back to insinuating intrinsic quantification into the definition. I plan to fix this at some point in the foreseeable future. — SlamDiego ←T 07:41, 10 December 2007 (UTC)
The introduction is way too complex to explain what marginal utility. Marginal utility is easiest defined against Total Utility rather than using an vague sentence that makes almost no sense. 86.143.19.22 ( talk) 11:13, 31 January 2008 (UTC)
“ | a preliminary thing, such as an explanatory section at the beginning of a book. | ” |
“ | adjective preceding or done in preparation for something fuller or more important. ORIGIN -- Latin praeliminaris, from prae ‘before’ + limen ‘threshold’. |
” |
BTW, here's a really easy conception of marginal utility for the typical reader to grasp:
That's not only a bona fide conception, it's basically the one with which Jevons was working. (Bear in mind that he inheritted his notion of utility from John Stuart Mill.) Yet I haven't seen anyone suggesting that the lede begin with this narrow, easy conception. Instead, there is the attempt to have the lede begin with the present neoclassical conception, in which the earlier neoclassical relationship has been stood on its head (so that cardinal “utility” proxies preferences). So far, no one is arguing for starting with that far easier early British idea, and I'd be surprised if anyone seriously did, because easiness isn't a G_d to which to make such sacrifices. — SlamDiego ←T 21:55, 4 February 2008 (UTC)
Thank you, Slam. Your new introductory sentence vastly improves the readability of the definition you offer. I think it should be accessible to the typical reader. -- Rinconsoleao ( talk) 09:08, 8 February 2008 (UTC)
I'm a random user who has very little economic background. I really want to understand marginal utility and its implications without taking an entire college course on economics. I'm by no means unintelligent or uneducated, but I still can't understand this concept based on the wiki. Could somebody explain it in plain english here, and then maybe it can be worked into an understandable article? I feel that there's too much economic jargon, even if it seems simple enough to someone well-versed in economics. 74.46.62.234 ( talk) 11:48, 17 April 2009 (UTC)
I'm still confused by the definition (first sentence). The second sentence doesn't help either. I'm also confused by the word "agent". Who is the agent? Perhaps it would dumb things down too much, but an example would help a lot. I will note that IMHO, this article is vastly more understandable, much more understandable with a good example: http://www.investopedia.com/university/economics/economics5.asp Clemwang ( talk) 18:41, 23 December 2009 (UTC)
The article is of mighty nice quality. However I think it looks a little bit boring, I believe an appropiate image or two would redeem this. Any opinions? Lord Metroid ( talk) 19:58, 21 February 2008 (UTC)
It might not be transparent why I have altered the claim that diminishing marginal utility is equivalent to risk aversion, to a claim that it implies risk aversion.
I am used to discourse in which “risk aversion” is a name (rather than a description), in which case indeed diminishing marginal utility is equivalent to risk aversion, but the present form of the article “ Risk aversion” treats “risk aversion” as a description. Diminishing marginal utility is then only equivalent to risk aversion under the assumption that utility is linear in the probabilities. — SlamDiego ←T 21:27, 7 March 2008 (UTC)
The Marginal Revolution and Marxism
"In his critique of political economy, Marx discussed “use-value”, a concept analogous to utility:
A use-value has value only in use, and is realized only in the process of consumption. One and the same use-value can be used in various ways. But the extent of its possible application is limited by its existence as an object with distinct properties. It is, moreover, determined not only qualitatively but also quantitatively. Different use-values have different measures appropriate to their physical characteristics; for example, a bushel of wheat, a quire of paper, a yard of linen.[35]
He acknowledged that the value of a commodity is dependent on the use that can be garnered from it,[36] but, in his analysis, utility was considered as all or nothing; it was unnecessary to describe variable use-value; to Marx labor was the ultimate source of value."
I fail to see how Marx is saying use value is all or none in the above. That sounds like something you have read into it. Indeed the statement "One and the same use-value can be used in various ways." implies relative utility, which may or may not be subject to diminishing returns. —Preceding unsigned comment added by Extropian13 ( talk • contribs)
This passage:
"Marginalists explain that costs of production may be what limit supply, but that these costs of production are themselves sacrificed marginal uses, and will not be borne when they are expected to exceed the marginal use of what is produced. In other words, the marginalist certainly does not explain price as a simple function of the marginal utility of a single good for one person or for some “average” person, but nonetheless insists that it results from the trade-offs that each participant would be willing to make for the various goods and services at stake, with those trade-offs being determined by marginal uses. The critics who believe that costs of production determine price, by assuming a demand that will bear the cost, have begged the essential question that the marginalists purport to answer."
Constitutes both circular reasoning, and Original Research. No source is given for the above. —Preceding unsigned comment added by Extropian13 ( talk • contribs) 23:16, 8 June 2008 (UTC)
I made a good counter argument on how the creation of artificial diamonds would lower prices, and thus vindicate the labor theory of value determined by the cost of production. This argument was deleted from the criticisms section with no reason given. —Preceding unsigned comment added by Extropian13 ( talk • contribs) 23:09, 8 June 2008 (UTC)
Also the above argument is not "Original Research" and thus violates no policy. It is based on another wiki article: http://en.wikipedia.org/wiki/Synthetic_diamond which itself has numerous references at the bottom. —Preceding unsigned comment added by Extropian13 ( talk • contribs) 23:14, 8 June 2008 (UTC)
Actually since the concept of marginal utility is completely subjective, even by your own admittance, I would say it has a lot more in common with creationism then my empirical argument.
Second, you are arguing that the creation of artificial diamonds does not refute the concept of marginal utility, but if so, what other conclusion can we come to? The very concept of marginal utility is rooted in the demand for diamonds, not supply. Simply put, the first is more valuable then the second for, as you said "subjective" reasons. Now you are saying even if we can make it so the first has a lower value, and value stays relatively consistent in the market place, we can still presume the price is determined by marginal utility. So basically whether diamonds raise, or lower in value as labor to procure them is increased or decreased- no matter what- this is evidence of marginal utility. To me that sounds like an ad hoc excuse which bares the concept from being empirically testable from the onset. —Preceding unsigned comment added by 72.220.23.229 ( talk) 16:32, 12 August 2009 (UTC)
Google Search Rank | URL | Quote |
---|---|---|
1st | http://www.bun.kyoto-u.ac.jp/phisci/Gallery/D.bernoulli_note.html | Daniel thought that the value of any amout of money is determined relative to one's whole wealth ... This makes y a logarithmic functin of x |
2nd | http://plato.stanford.edu/entries/paradox-stpetersburg/ | He went on to suggest that a realistic measure of the utility of money might be given by the logarithm of the money amount |
3rd | http://cepa.newschool.edu/het/essays/uncert/bernoulhyp.htm | Bernoulli originally used a logarithmic function |
4th | http://c2.com/cgi/wiki?MarginalUtility | Let U(m) be the utility (i.e. the desirability) of an amount of money ... U(.) is a slowly increasing function, and roughly logarithmic |
This string of edits result in presumption that utility must be quantified for there to be a violation of the “law” of diminishing marginal utility, or at least that it must be quantified for marginal utility to be in any sense increasing. That's simply not the case; the only thing required for diminishing marginal utility is that
where is the best possible use of the unit of the good or service. The only thing required for increasing marginal utility is that
And the examples presented do not require quantification to be explained or even in themselves imply quantification. (And if they had implied quantification, then the exposition should have exhibited the quantification if it were labelling the utility “cardinal”.) — SlamDiego ←T 14:37, 1 September 2008 (UTC)
Aaquilino's reference to McConnell is ill-considered. Nowhere in McConnell is there a proof or even a claim that diminishing marginal utility is insufficient for convexity of indifference curves. (Discussion is in the appendix to Chapter 21.) Again, the claim of insufficiency is “original research”, and it is quite in error. — SlamDiego ←T 18:40, 17 October 2008 (UTC)
(Not in McConnell's text, but elsewhere, I have found authors claiming that diminishing marginal utility is not sufficient, but this claim is based on a notion of “diminishing marginal utility” such that is said to be “diminishing” when it is not, in fact, diminsihing. More specifically, it is said to be “diminishing” when it would diminish were it not for interaction with the other good. There is a distinction between utility obeying the “law” of diminishing marginal utility and utility diminsihing more generally. This issue was meant to be picked-up by the “all else being equal” earlier in the article; I have added a parenthetical note on complementarity of uses to make matters more explicit.) — SlamDiego ←T 10:24, 18 October 2008 (UTC)
The deeper issue is this: marginal utility theorists were aware, before Hicks and Allen, that complementarity could throw a wrench in the works. So they assume an absence of significant complementarity as typical. Hicks and Allen just more baldly assume that indifference curves are convex. In other words, the marginal utility theorists assumed-away one thing which would lead to non-convex indifference curves, while Hicks and Allen just assumed-away the non-convexity. The fact that marginal utility theory needs the one assumption, whereas Hicks and Allen make the other, doesn't show that the former is somehow incorrect or that the latter is somehow more advanced. — SlamDiego ←T 22:21, 18 October 2008 (UTC)
McConnell does provide a fine illustration of a mainstream economists who bobbles marginal utility theory and thus thinks that it is old-fashioned and ultimately incorrect. McConnell represents indifference curve analysis as “A more advanced explanation of consumer behavior and equilibrium”. He proceeds to this comparision from the presumption, explicitly given in the Appendix to Chapter 21, in a section entitled “The Measurement of Utility”, that
The marginal utility theory assumes that utility is numerically measurable, that is, that the consumer can say how much extra utility he or she derives from each extra unit of A or B.
That's simply wrong on two counts.
First, as has been repeatedly labored on this talk page, the general theory of marginal utility does not assume that marginal utility is numerically measurable.
Second the assertions
are not equivalent. That's a matter of simple logic. As many or most readers of this talk page will know, when there is an assumption of numeric measurability,
— SlamDiego ←T 18:40, 17 October 2008 (UTC)
Hello,
I just thought I'd point out that the while the Marginal Revolution may not have been a direct response to Marx himself, some scholars suggest that it was a reaction to workers movements and socialist movements who were inspired by the Ricardian labor theory of value long before Marx arrived on the scene. As Ronald Meek points out in "Studies in the Labor Theory of Value", there were many "radical economists" before Marx that picked up on the classical LTV to agitate on behalf of workers (121). —Preceding unsigned comment added by 76.171.216.108 ( talk) 16:32, 21 November 2008 (UTC)
The “History” section is about the history of the development of the idea of marginal utility, and presents its material in historical order. The subsection “The Marginal Revolution and Marxism” is concerned with the historical significance of Marxism for the development and adoption of the idea of marginal utility, not for Marxist pot-shots from just any era. A criticism from a 1977 book plainly played no rôle during the Marginal Revolution.
As to the quotation from Mattick, with the first sentence untruncated, it is
It was not long until the entire theory of marginal utility was abandoned, since it obviously rested on circular reasoning. Although it tried to explain prices, prices were necessary to explain marginal utility.
The truncation both changes the meaning of the sentence and represents an attempt at “synthesis”. Mattick's original claim is written with a reckless disregard for the truth; one can read “A Reconsideration of the Theory of Value” and Value and Capital (by Hicks and Allen, whose work displaced marginal utility) for the actual reasons that the notion of marginal utility fell from favor, and these reasons are summarized in the subsection “Eclipse”: the mainstream didn't see circular reasoning; they saw an unnecessary assumption of some underlying quantity.
Nor was there any circle, perceived or actual, in the relationship between the explanation of prices and of marginal utility. Lots of systems exist with feedback, and explanation that acknowledge and describe feedback aren't ipso facto examples of circular reasoning.
This criticism would quite fit amongst the Marxist attacks in the “Criticism” section of “Marginalism”, insofar as that screed-of-a-subsection generally serves to make Marxists look bad by a failure of some Marxists to comprehend the structure of marginalist theory. — SlamDiego ←T 11:29, 25 January 2009 (UTC)
There are problems with putting the paradox of water and diamonds in the lede section.
First, the paradox is not really one of two peculiar goods; but, without a background, many readers are going to take it as such, as if the whole point was to resolve a strangeness just about water and diamonds.
Second, even if it is made clear that this paradox exists across multiple pairings of types of gooda and of services, there is still the impression given that the principal use of the marginal utility concept is to resolve a paradox. But, while the paradox served to draw attention, the concept could have been developed without it. Indeed, Cramer and Bernoulli didn't reference that paradox at all when they made their explicit introductions of the concept, which predate those by Lloyd, Senior, &alli; the lede section could as much or more reasonably declare that “The ‘law’ of diminishing marginal utility can explain the ‘ St. Petersburg paradox’” — that paradox which provoked Cramer and Bernoulli. But the concept could have been developed without consideration of either paradox, and carries a lot more water than resolving a paradox or two. — SlamDiego ←T 10:09, 27 January 2009 (UTC)
Edit 267902796 is wrong on two counts. First, the marginal utility of one good or service is not immediately associated with a change in the quantity of any good or service, but with a change in that good or service. Second, the word “either” makes a disjunction exclusive, but there really isn't a clear distinction between goods and services. Ultimately, we want goods exactly for the service that they provide. — SlamDiego ←T 23:20, 1 February 2009 (UTC)
Since no one has nominated this article, I think I will. According to Wikipedia, the criteron for knowing if an article is GA is: (the article is) Useful to nearly all readers, with no obvious problems; approaching (although not equalling) the quality of a professional encyclopedia. -- Forich ( talk) 17:08, 15 February 2009 (UTC)
The problem with the water example is that it doesn't go to show that there is less value assigned to each additional water and so doesn't explain the most common scenario of the law of diminishing marginal utility as succinctly described by http://wiki.answers.com/Q/Law_of_diminishing_marginal_utility
The problem with the example is that the use of the water changes. So rather than have e1, e2, e3 (the value of the same substance water which we'd like to compare). We are really comparing uses of water, a, b and c, and the assigned relationships between them i.e. human>dog>plant. What makes this more confusing for readers is that although the dependencies between these uses are described in reality they are more complex (this is mentioned that it might be that plant>dog>human) but there might be arguments such as, why not give half the water to yourself and the second half to the dog. Obviously this seeks to alter the scenario, but ideally the hypothetical scenario chosen should not offer too many real world distractions for readers.
My biggest problem with the example is that it doesn't actually prove that diminishing marginal utility is taking place. I could claim that when you receive two waters, that actually the utility of the second water equals the first! But since the example is set up in terms of matching and you don't have the opportunity to give the 2nd water to yourself again, you can't actually demonstrate that there is less utility in it. There may indeed be the same utility in that water, but because in this hypothetical world to avoid waste the only next best thing you can do is give it to the dog, then that is what you do. Even if the example was modified to allow for the possiblity of giving the water to yourself, it wouldn't demonstrate DMU is taking place.
Can we come up with a better example please?! As it stands, I don't think this should be nominated as a good article. Even mangos with theoretical utility would be better as in wiki.answers.com. Obviously if we can find one that makes a natural comparison and is easier to understand that would be best. -- Dmg46664 ( talk) 15:30, 11 May 2009 (UTC)
A pioneer farmer had five sacks of grain, with no way of selling them or buying more. He had five possible uses: as basic feed for himself, food to build strength, food for his chickens for dietary variation, an ingredient for making whisky and feed for his parrots to amuse him. Then the farmer lost one sack of grain. Instead of reducing every activity by a fifth, the farmer simply starved the parrots as they were of less utility than the other four uses; in other words they were on the margin. And it is on the margin, and not with a view to the big picture, that we make economic decisions. [1]
Bkwillwm effected two changes.
The first of these, insertion of “{{main|Diminishing marginal utility}}”, created a loop-de-loop, as “ Diminishing marginal utility” is just a redirect back to that very section of the article.
The second, removal of
(The diminishing of utility should not necessarily be taken to be itself an arithmetic subtraction. It may be no more than a purely ordinal change.)
is apparently supposed to be motivated by the edit summary: “This is the Austrian view of utility, which is already in the article. We don't need to qualify use of the word utility.”
The isssue that the removed section addresses is not whether marginal utility is necessarily quantitative, but whether marginal utility can diminish wihout being quantitative. The talk history of this article and discussions elsewhere have repeatedly shown that some people (including some holders of economics degrees) often think that at least a weak quantification must hold for marginal utility to be meaningfully diminishing. (Indeed, look at the objection which began the immediately previous discussion here.)
As to the relationship of the Austrian School, the mainstream notion of ordinal utility is indeed weakly quantified, based on the presumption that any rational preference ordering can be fit to some quantifications, but that none of the quantifications to which it can be fit is uniquely meaningful. It remained for J.H. McCulloch to shown (by adapting mathematical work from probability theory) that some rational preference orderings could not be it to any quantification, but that the Austrian School notion of utility, of marginal utility, and of dminishing utility remained coherent. This article doesn't need to shout “Rah! Rah! Austrian School!”, but it needs to present the subject of marginal utility at full generality. The possibility of an assumption of quantification is repeatedly noted as relevant, but it needs to be distinguished from the underlying concepts of utility, of marginal utility, and of diminishing marginal utility. — SlamDiego ←T 12:59, 12 May 2009 (UTC)
Is the goal to describe what experts know, or to educate the general public? These are two completely different things. (It seems to me, the goal must be clearly resolved and authors must be willing to pay the costs of that choice.)
For example the short section on Marginality seems to do the former, but not the latter. The reason why it makes sense to the expert is because he already has examples in his head. But to the general public without those anchors, almost any of those sentences can have many meanings. Compound all those possible paths as sentence is added to sentence, and one quickly lands in confusion and chaos.
One possible remedy for this is to add examples. (Or when complex, perhaps several varied examples.)
One cost of adding examples is adding bulk. This implies cuts elsewhere may have to be made in the name of best reaching the over all goal. However, would not the general public find many of these subcategories rather rare and arcane? An encyclopedia article should not attempt to outline a semester.
I am often disappointed in Wiki's technical articles that have not subjected themselves to this discipline, and seem to be written for the pleasure of the authors, ("See MY education!") rather than to educate the general public. —Preceding unsigned comment added by 68.127.88.207 ( talk) 20:01, 18 July 2009 (UTC)
After extensive discussion, SlamDiego agreed to make some simplifications to the introduction, but other users still argue that the introduction is inappropriate: [2]. Another user recently made a long, substantive argument about why this article needs to be simplified, but SlamDiego considered parts of his argument offensive and therefore insisted that they be deleted. I will restore parts of those arguments below, trying hard to avoid parts that might be construed as personal attacks.
But before I do that, here is my main point. SlamDiego has tried to write an introduction that is fully accurate that deals with (what he considers) a fully general treatment of the concept. Readers have repeatedly complained that his introduction is incomprehensible.
I would instead suggest writing an introduction that is not fully general. An introduction can be entirely accurate, without being entirely general, as long as it makes entirely clear that it is simplifying by discussing a special case. Greater generality can be (and should be) achieved later on in the article.
Of course, what is 'simplest' is in the ear of the beholder. Most of those who complained about this article have instead suggested definitions that involve 'quantified' notions of utility, which SlamDiego has argued is not necessarily the simplest way of presenting the concept. But given the long history of challenges to this article, I would strongly favor changing to an introduction other users would find simpler.
Previously deleted comments of the other editor, arguing in favor of starting with a more elementary introduction, are shown below. They come from the section 'Whats the goal of this article'. I have edited out a few sections that might be construed as personal attacks. -- Rinconsoleao ( talk) 10:28, 23 July 2009 (UTC)
Google; "define: Marginal utility"
Definitions of Marginal utility on the Web:
- (economics) the amount that utility increases with an increase of one unit of an economic good or service
http://wordnetweb.princeton.edu/perl/webwn?s=marginal%20utility
- The additional utility to a consumer from an additional unit of an economic good
http://en.wiktionary.org/wiki/marginal_utility
- In a utility function, the increase in utility associated with a one-unit increase in consumption of one good; or the partial derivative of the utility function.
(The preceding sections were re-inserted by -- Rinconsoleao ( talk) 10:35, 23 July 2009 (UTC).)
The lead should be able to stand alone as a concise overview of the article.
Good, now we are making progress and addressing the structure of the article. I see no problem at all in sticking to the Wikipedia principles displayed above-- one can easily begin with a special case and generalize it in much less than four paragraphs in a way that allows the lead to stand in for the whole article.-- Rinconsoleao ( talk) 12:13, 23 July 2009 (UTC)
As for the definitions offered by Doug, every single criticism offered by SlamDiego is a criticism about their generality. In other words, each definition is correct if applied in the context of a particular way of thinking about utility and/or a specific way of counting changes in use. They are only incorrect insofar as they fail to deal with more general frameworks of analysis. Therefore, I think any one of those definitions, with small changes perhaps, would be an adequate introductory sentence for the article, as long as the article immediately makes clear that they are not fully general. -- Rinconsoleao ( talk) 12:18, 23 July 2009 (UTC)
The first paragraph of the introductory text needs to unambiguously define the topic for the reader.
SlamDiego bases his objection to an introduction most readers would find simpler on claims that the proposed alternatives are not fully general.
However, it seems unlikely that the definition offered here is in fact fully general. None of the references I have seen show exactly how the theory of Marginal use on which SlamDiego bases his supposedly general definition can deal in full generality with issues of time and probability.
For example, standard 20th century general equilibrium theory deals with contingent goods, like 'a bushel of wheat delivered in Chicago at noon on June 20, 2001, if it is raining at that time'. What exactly is meant by the 'use' of such a good? Standard general equilibrium theory need not ask this question, because its definitions of utility do not go by way of a definition of uses; instead, utility is defined as a partial ordering of bundles of goods. Has the Austrian theory of Marginal use answered questions like these? Not in the references I have seen. If it has not, then the definition offered in this article is not general and therefore has no claim to priority over other definitions that are also correct within their own limited theoretical contexts. -- Rinconsoleao ( talk) 13:47, 23 July 2009 (UTC)
An editor, who signed as 'Doug' but did not give his Wiki user name, made some comments on this page which seemed to me very useful. User SlamDiego deleted them, interpreting them as a personal attack. I have tried to restore them, but SlamDiego deleted them again. I have tried to point out to him that the language he specifically interpreted as a personal attack does not, to me, seem like a personal attack. I would ask SlamDiego, please, to restore those comments (feel free to delete specific bits that you interpret as a personal attack); otherwise I would ask other editors to restore them.
My main concern about this page, like that of many others who have criticized it, is that it fails to introduce the material in an accessible way. I believe that can be done, with no lack of accuracy, as long as we make clear that simple definitions based on 'quantifications' of utility are not a fully general treatment of the concept. SlamDiego made some progress on clarifying the introduction in response to my previous comments (above), but I think, and other readers agree, that the page still fails to achieve sufficient clarity. -- Rinconsoleao ( talk) 08:05, 23 July 2009 (UTC)
What is the purpose of communication? I would suggest the more people than can correctly understand the message the more successful the communication would seem to be. As an economics student I've found that in relation to textbooks the less accomplished is an author the more complicated is the language in the text (regardless of the subject matter), the explanation seems to be related to an intellectual form of "small man syndrome", the same could be said about Wiki articles. —Preceding unsigned comment added by 220.253.93.55 ( talk) 00:53, 28 August 2010 (UTC)
This section does not prove for the claim that self-interest is not occurring in a scenario where the individual is making a choice to create greater value for someone else, particularly when it describes actions which are clearly volitional in nature, therefore based on conscious choices. There are at least two reasons why this is problematic:
1. Example: A mother may place greater priority over the life of her child, but to choose such a decision is still based on a set of self-interest based priorities (and arguably so, which goes to the second problem...)
2. Value is subjective to the individual, which is at best an empirical but informative enough point from which to establish economic theory or law.
Insomuch that an individual could act outside of self-interest, this does more to question whether such an agent can be perceived as possessing an ethical/moral capacity in order to be characterized as a volitional entity in the first place.
There is reason to argue against presumptions of objectively determined value as they contradict the purpose of economic study altogether (sans fictional constructs meant to inform readers), but to claim that self-interest is not present when discussing volitional actions runs counter to what the sphere of economic study is about.
If you want to ascribe motives to storms and tides, this is not the place to do so. —Preceding unsigned comment added by 75.69.194.194 ( talk) 04:04, 7 August 2009 (UTC)
Your edit to “Marginal utility” replaced a general definition with one particular conception, and was therefore wrong. For example, as the article itself notes, the mainstream of economic theory does not define “utility” in terms of satisfaction; rather, “utility” is defined as a quantified proxy of preference. (Introductory undergraduate courses often punt to something like the original conception of the British marginalists, because it's easier to teach and because few economists are in fact really familiar with topic more generally. But “ Wikipedia is an encyclopedic reference, not a textbook. The purpose of Wikipedia is to present facts, not to teach subject matter.”) And marginal changes are not simply any potential or actual increases, but also decreases. — SlamDiego ←T 18:09, 6 January 2010 (UTC)
Your unnecessarily dense wording, including the "quantified proxy of preference,"
by "dense," I was referring to the current wording of the lead, not anything you posted on some talk page
It appears I've stepped into the middle of an ongoing discussion. A suggestion, if agreement cannot be reached, please leave a note at the Wikiproject Economics talk page, for help to reach a resolution. LK ( talk) 04:53, 7 January 2010 (UTC)
I've read the history of the article, and it strikes me that so many editors (most of them with good achievements in Wikipedia) can't agree on such a known subject in economics. I hope that we can bring this to Good article nomination (as soon as the edit wars stop). Here is my modest take on reviewing the body of the article. By the way, I am a neoclassical orthodox economist with a little knowledge of the Austrian view (basically, I read and studied the McCulloch 1977 article that is cited in the history of this talk page).
I have no complaint on this section. It is clear and accurate. Orthodox theory do consider marginal changes to be inifinitesimal.
Under orthodox theory, it is not necessary to give different uses to the marginal change of a good or service, so this paragraph may be revised to be more general. In fact, I believe that the word diminishing was first used to reflect the fact that: i) there was a psychologycal saturation after consuming the marginal change, and ii) there was an arithmetical change that was negative in the cardinal utility of the individual. Later, when the discipline moved towards ordinality, the term diminishing lost any psychological interpretation (an equivalent utility function could give you now a positive second derivative) but instead got clouded under several assumptions about satiability, convexity, and etc (what us orthodox call primitives). I think that when people in the early 20th century refer to a diminishing marginal utility they meant the british or marshallian approach (the one where it doesn't matter what ordering you give to potential uses), even though Menger had a lot of notability with his examples of farmers giving different ordered uses to goods (only that mainstream textbooks just said: hey, Menger did the same as Marshall, except that he used non-mathematical examples).
This argument is supported with references from 1968 and 1977 (wich are reliable, no doubt), but I think they push some Point of View (POV). Here is the semantic trouble as I see it: Austrian had an excellent and original definition of hierarchical-uses-of-descending-importance which McCullochs' article calls diminishing marginal utility, BUT this was in 1977 and so it conflicts with the orthodox definition that got into mainstream since Marshall years (c.1890). So we have a case where a better theory borrowed the term diminishing marginal utility when they actually refer to hierarchical-uses-of-descending-importance. The keyword is diminishing: utility (orthodox utility) actually diminishes (as in going from 10 utils to 9 utils), whereas uses (austrian uses) just descend in the scale of importance, so no quantity is diminishing here. The problem is semantic, because it's not, strictly speaking, the same concept. Later in his article, McCulloch explains that, as an extension to the formalization he is providing, a numerical index can also be attached to the austrian approach (even though it is not necessary for it to work).
I agree with this one. Self interest enters orthodox microeconomics only to the extent that people make choices based on the maximization of their own utility functions, there is nothing in the "primitives" or assumptions-preference-orders that explicitelly mandates people to be egotistic.
Finally, the history section is what I like the most. It is well balanced, rich in facts, neutral POV, and well written and illustrated. So, in conclusion, I think that the article is excelent in its current state, except that for some parts of it, marginal utility needs to be divided into two: there is a british marginal utility, and an austrian marginal utility, and they are not strictly the same concept. Unfortunately, to label the former two in a different way would be original research. I don't agree with the view of the main editor who says that general = austrian and specific = orthodox (a view that ultimately reflect on the discussion over the lead): the article is about a not-so-good theory (the british one, let's admit it) that has taken for its own the concept of marginal utility, on the other hand, the austrians have a good theory that is not based on the exact same concept. In other words, history has given prominence to the marginal utility of the british, but many years later, austrian realized that they had: i) polished the concept of marginal use that magically wraps everything together; and ii) formalized their ideas in a way that made everithing quantifiable and thus, more comparable to the british-orthodoxy, and now the two things are making its definition a mess.-- Forich ( talk) 01:52, 15 January 2010 (UTC)
Under the mainstream assumptions, the marginal utility of a good or service is the posited quantified change in utility obtained by increasing or decreasing use of that good or service.