Talk:Marginal utility

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[edit] Nope

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)

[edit] Introduction is unneccesarily complex

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)

Absolutely. It is far too complex. Many users have complained about this, including myself. In July 2007 I proposed the following introduction---
In economics, under the assumption of cardinal utility, the marginal utility of a good or service is the increase in utility obtained by consuming or using one more unit of that good or service. However, this apparently simple definition hides some subtle philosophical issues. In particular, many economic thinkers argue that utility is not quantifiable: even if we can say that one consumption basket is more desirable than another, that does not imply that there is any meaningful scale of units to measure satisfaction or happiness. Therefore, "how much utility increases" when one more unit of some good is consumed is, according to this argument, a meaningless question.
Unfortunately, User:SlamDiego insists on maintaining this page according to his/her own criteria (which, if I understand correctly, reflect an Austrian school point of view). He/she has objected repeatedly to many users' attempts to improve readability. --Rinconsoleao (talk) 11:27, 31 January 2008 (UTC)
Well, I would think that with the studies he/she has embarked upon, the importance of clarity in communication and texts is paramount. Unfortunately, seems a personal agenda is more priori. 86.143.19.22 (talk) 11:38, 31 January 2008 (UTC)
My “personal” agenda is simply that the definition be correct. —SlamDiego←T 15:34, 31 January 2008 (UTC)
No, that's a willful misrepresentation of what I've been doing. What I have insisted is that quantification not be treated (explicitly or implicitly) as part of the general definition of marginal utility, because it isn't. The problem has been that people unfamiliar with the literature (other than the neoclassical literature) know only the the neoclassical view and think that they are simplifying the definition and principles when they are in fact over-simplifying them. Further, the lede was most complex after two neoclassical economists had at it (and buried the simple general definition under a circuitous paragraph of predefinitions); then neither of those two did anything after someone else came along and “simplified” the lede by removing from it that exposition of the general definiton, turning the lede back into a presentation of only the neoclassical conception. —SlamDiego←T 15:34, 31 January 2008 (UTC)
Two errors were noted in your definition above. The most easily understood is the reference to “one more unit” — a unit is a regular change; the general concept of marginal utility does not require regular changes. The more important error is that your conception clings to a weak cardinalization of utility, confusing weakness with absence. And G_d knows that the issue of true ordinality v. weak cardinality and of unitary versus more general changes were discussed at length. —SlamDiego←T 15:50, 31 January 2008 (UTC)
I had to fish that lede out of a long page history, so I'm not sure it was the last version. I know you had disagreements with it, in particular distinguishing 'quantified' from 'cardinal'. I would be delighted to work with you on achieving that sort of precision if you would help me achieve an introduction accessible to a wide audience. However, after previous discussions, my impression is that a sufficiently clear opening statement will not be compatible with making the opening statement an entirely general definition (if, for that matter, the latter is possible). By the way, there may have been misrepresentation above but if so it was not willful.
By the way, my personal agenda is: (1) that the article be correct; (2) that the article be neutral; (3) that the article be a useful source of information for the largest possible audience. --Rinconsoleao (talk) 18:39, 31 January 2008 (UTC)
I engaged in a very lengthy discussion with you on each and every point; now you assert, in effect, that you just forgot.
Okay, now, first, an incorrect definition is simply not acceptable. A reader left with illusory understanding is worse-off than one who knows that he or she doesn't understand the subject. And a definition of “marginal utility” that assumes even weak quantification is as wrong as a definition of “mammal” that assumes a tail.
Second, it certainly says something that you accuse me of seeking to advance the Austrian School by my insisting that the definition be correct, while the “simplifications” always operationalize as pushing the neoclassical conception.
(If I were truly seeking to push the Austrian School, then my discussion in the article of quantification would be dismissive, or I'd do the complement of what you have done, and just delete the discussion of quantification.)
Our empirical representative for the general audience, the member of Version 1.0 Editorial Team, didn't have any trouble with the definition. It's people who arrived here mistakenly believing that they already grasp the concept who have argued that it is confusing and has to be quantified (for expository purposes or otherwise). Indeed, those people too should be served, but [1] by being exposed to the general concept rather than having their narrow preconceptions reinforced, and [2] certainly not at the cost of misleading readers who do not come with those preconceptions.
I offered to work with people on making the definition more accessible while keeping it correct. Instead, a neoclassical editor buried the general definition, making it seem parallel rather than more general, and requiring the reader to wade through multiple ad hoc technical predefinitions to get to the definition; while I had to deal with lots of bad math as the other kept trying to prove, after all, that quantification was fully general, and now acts as if he forgot the whole exercise, pushes the neoclassical special case definition as the one to use, and accuses me of non-neutrality.
Bah. —SlamDiego←T 19:41, 31 January 2008 (UTC)
My definition, shown above, is not incorrect, because it clearly refers to a special case (cardinal utility). The next paragraph then went on to discuss definitions of MU not referring to that special case. Maybe someone deleted the Austrian version, but at least in the versions I worked on after hearing your arguments, I did not delete the issue of quantification or the Austrian definition. --Rinconsoleao (talk) 18:12, 4 February 2008 (UTC)
Your definition is incorrect as a definition; it leads the reader to believe that marginal utility is defined within the concept of cardinal utility, and meaningless otherwise.
As to deletion, you in fact overtly acted to truly eliminate the general explanation of the “law” of diminishing marginal utility, and you certainly did nothing when the general definition was altogether removed from the lede. —SlamDiego←T 20:36, 4 February 2008 (UTC)
The reason my proposed simplification referred to the neoclassical conception is not because I'm a neoclassical. I don't think I am one. It's because I do, in fact, think the neoclassical conception is simpler. The neoclassical conception defines MU as a difference (or derivative, depending on context) of a function. Your definition defines MU as the value associated with minimizing over one set (of uses) while maximizing over another (of actions) subject to a restriction (inclusion of a use). Actually, I'm not sure that's right, because it's very hard to state succinctly. But that's my whole point. This (purported) 'generalization' of the concept is really pretty hard to think about. The difference in a function U at two points x0 and x1 is a much simpler concept. That's why I propose focusing first on that case, even though it is essential for accuracy to point out that it is, in fact, a special case. --Rinconsoleao (talk) 18:12, 4 February 2008 (UTC)
Again, the general concept is not more complicated. Your introduction of derivatives perfectly illustrates the issue. For you and for me, the complications of the calculus are familiar and easy; but they are complications nonetheless. And they are complications with which most readers of Wikipedia are unfamiliar; thinking in terms of functions is not something with which most readers will be comfortable. (Even simple arithmetic is a complication, albeït one familiar to most readers.) You utterly misjudge what is and is not a complication, and even what is and is not easy, because you don't see the intellectual infrastructure — and you struggle to see the flaw in that infrastructure that makes it difficult for you to recognize and understand the general concept of marginal utility.
And it's certainly not proper for you to insist that the article push aside a concept when you admit that you can't even figure out whether it is in fact the concept.
I tried to set up previous discussion so that you (and anyone else who was interested) could be walked through the general concept, after which you could perhaps have come up with ways of indeed expressing that concept more accessibly. Unfortunately, you were so cock-sure that I didn't understand things and you wouldn't attend to that, and you instead saturation-bombed the discussion with what proved to be mathematical duds. And the failure of that bad math didin't dissuade you from still pushing for replacing the general concept with the neoclassical conception. —SlamDiego←T 20:36, 4 February 2008 (UTC)
I don't know who that Editorial member was, but perhaps he/she was a noneconomist checking for grammatical correctness, without knowing what the most common introductory definition of MU is? --Rinconsoleao (talk) 18:12, 4 February 2008 (UTC)
No, the function of the Editorial Team is not to proofread. As to him not knowing what the common definition is, yeah, he probably didn't; as I keep saying, people who have been led to believe that the neoclassical conception is the general concept are, by virtue of being misled, more challenged in learning the general than those starting fresh. —SlamDiego←T 18:23, 4 February 2008 (UTC)
No, you're insisting on a definition that hangs upon some concept (that you have not here defined) which you label “Total Utility”. It's not that the lede makes “almost no sense”; it is merely that it doesn't fit your preconceptions. —SlamDiego←T 15:34, 31 January 2008 (UTC)
You're arguing it be correct, I'm arguing that you're not understanding what the purpose of an introduction IS. An introduction shouldn't be the place to take into account every possible caveat in defining subjects; I have never seen in any of the books in other subjects that I've ever read, other than as juxtaposition to a standard definition. Although there are exceptions and other circumstances in the field of Nucleophilic substitution or Polarity, their definitions aren't rewritten to accomodate these exceptions because it defeats the purpose of what an introduction is. I don't see where the confusion is in this matter - you're by NO means a stupid person.
“ a preliminary thing, such as an explanatory section at the beginning of a book. ”
"introduction" -- Oxford English Dictionary
“ adjective preceding or done in preparation for something fuller or more important.
ORIGIN -- Latin praeliminaris, from prae ‘before’ + limen ‘threshold’.		 ”
"preliminary"-- Oxford English Dictionary
For users which are wanting to read this article to get a ramp into what Marginal Utility is, the old version although indeed correct just seems too complex and accomodating -- I know we're in the "business" of keeping things accurate here, but this shouldn't overwhelm one's rise to logic. If there is a problem with the definitions between neoclassical and possible conflicting theories, then I don't see why they can't precede the standard. I don't think that there are people who are consciously biased towards a particular field of Economics as I'm generaly not that skeptical. 86.151.222.13 (talk) 20:10, 1 February 2008 (UTC)
Your claim that I do “not understanding what the purpose of an introduction IS” is foolish, and your quotations are not to-the-point.
  1. Again: A person who is misled is worse-off than one who realizes that he or she doesn't understand. I have repeatedly agreed that the definition would ideally be more accessible, but the lede is indeed an explanation, and it is sometimes the only part of the article with which a reader will bother. It even more important that this lede not assert that utility is quantified than that the lede for mammals not define them as having tails.
  2. Again: I have repeatedly declared mysedf as in favor of any definition that is more accessible than the present definition, so long as that definition is correct. No one on this talk page or in an edit to the article has presented a definition that is correct and more transparent. Instead, there has been a consistent pattern of attempts to erase or obscure the general concept, and to present the neoclassical conception as if it is the general concept.
  3. Again: The editor for the Version 1.0 Editorial Team had no problem with the “old” definition, so the issue of transparency has been exaggerated. The people having trouble are those with a prior exposure to the neoclassical paradigm. These people should be served, but not at the cost of reinforcing narrow conceptions nor of impairing the ability of those without such prior exposure to think more generally.
As a matter of logic, I would also note that the neoclassical conception is in fact the more complicated — it imposes the additional (albeit familiar) structure of quantity. The general concept is not more complex; it is more abstract, which is the very nature of generality.
—SlamDiego←T 20:43, 1 February 2008 (UTC)
But who's being misled? The alternatives we have offered have all made clear that they are NOT fully general, and have attempted to build in the complexities of the concept gradually. Of course it would be wrong to say "MU is the difference in utility associated with consuming one more unit" without any further discussion. But that's not what the alternative versions have done, is it? --Rinconsoleao (talk) 18:23, 4 February 2008 (UTC)
No, there it was not made clear that the definition was not fully general in the most of of what you have offered, including the most recent definition (which leads the reader to believe that marginal utility is defined in the context of cardinal utility (and that he or she must know what the ____ “cardinal” means before learning the concept). In others, you misled the reader into thinking that the generalization arose from the Benthamite notion. And (since you write of “we”), your alternatives, instead of building to the general conception, treated it as a parallel conception, and buried it in predefinitions which ensured that few weould read and virtually none could understand it. —SlamDiego←T 20:53, 4 February 2008 (UTC)
Again, I have to insist, the definition I offer above is correct, because it explicitly warns that it is not general. Generalizations should be discussed later on if they are more complicated. --Rinconsoleao (talk) 18:50, 4 February 2008 (UTC)
No, it certainly does not explicitly warn them. Again, you mistake what you're actually doing, because you don't see the intellectual infrastructure. —SlamDiego←T 20:53, 4 February 2008 (UTC)
Thanks, 86, for making a great point. Personally I suspect that if we demanded the level of correctness and generality Slam is insisting on, almost every page in Wikipedia would start with a paragraph a thousand words long. Most concepts (especially complicated philosophical concepts like utility) have many caveats requiring clarification in order to be fully (if at all possible!!) correct. A good encyclopedia article, in the opinion of many people who have looked at the MU article, is one that starts with the simplest explanation possible, and then builds on sophistication over the course of the discussion. --Rinconsoleao (talk) 18:23, 4 February 2008 (UTC)
First, stop inserting comments out-of-order. When you do so, you make it difficult if not impossible for anyone to later come along and follow the discourse.
Second, how would you view it if a simplification theory were used to rationalize pushing the labor theory of value by some of the same people who had previously pushed it based upon a claim that it were correct? (Y'know why Ricardo used the labor theory of value? Not because he thought that it was correct, but because he thought that it was a highly useful simplification.) —SlamDiego←T 18:38, 4 February 2008 (UTC)
My understanding is that utility is a model used to analyze human behavior. All models are simplifications. Whether a given simplification is acceptable in a given context depends on the question at hand-- i.e. does it simply help one arrive at a clear answer (good) or does it tend to qualitatively change the answer obtained (bad)? So I see no problem with Ricardo's use of that assumption for the questions he analyzed when he analyzed them. --Rinconsoleao (talk) 18:49, 4 February 2008 (UTC)
It is a very great mistake to confuse a model with the thing modelled. The neoclassical conception is a model of utility. (Whether the conception is thus a model-of-a-model is a question that we can perhaps set aside.)
An answer can be clear but wrong; and it can certainly be clear while qualitatively different.
The article by Mc Culloch (referenced in the article and in previous discussion) demonstrates that the neoclassical conception precludes rational orderings that the general conception does not; hence, there is a qualitative difference introduced by the neoclassical model.
(There would also be a resultant need in the article to discuss the issue of proxies to deal with the standard criticisms of marginal utility theory, which challenge the existence of utility.)
The question is not whether one can get away with using a labor theory of value in some contexts. The question is of how one would feel seeing advocates of the labor theory reach for one excuse after another to rewrite the economic articles in Wikipedia (or the like) to presume said theory. —SlamDiego←T 19:12, 4 February 2008 (UTC)

BTW, here's a really easy conception of marginal utility for the typical reader to grasp:

The marginal utility of a good or service is the amount by which pleasure or pain would be increased or decreased by a given increase or decrease in the good or service.

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)

The definition above sounds pretty good to me. Would you have any problem with amending it as follows:
The marginal utility of a good or service is the amount by which utility would be increased or decreased by a given increase or decrease in the good or service.
I would not object to a lede of that sort, providing that the article then goes on to discuss various ways in which those concepts have been more rigorously developed. --Rinconsoleao (talk) 09:19, 5 February 2008 (UTC)
You're deliberately ducking the issue of easiness now. You want to insist that utility be presented as quantified because that's easy; well, it's easier still for the layperson to conceptualize utility as pleasure or as the reduction of pain. You won't go that far (despite the historical precedent) because you're only in favor of easiness to the extent that it advances the conception with which you have been most familiar and comfortable. (And, again, the Austrian School conception did not develop from the British conception.) —SlamDiego←T 17:22, 5 February 2008 (UTC)

[edit] Thanks

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)

Glad it was resolved. Boy, what a strange breed us humans are. 86.130.155.136 (talk) 15:39, 8 February 2008 (UTC)
I remain open to anything that will increase accessibility while not introducing error or otherwise misleading the reader. —SlamDiego←T 18:53, 8 February 2008 (UTC)

[edit] Images

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 really depends upon what sort of images one proposes to put here. —SlamDiego←T 07:25, 22 February 2008 (UTC)
I have got no real good idea, maybe an image showing how value of a goods owner decreases with the number of goods he has or some other relationship. I want to try to promote this article to a good article and one of the criterias is images. Lord Metroid (talk) 08:49, 22 February 2008 (UTC)
Well, first, I think that there are some issues in the writing that need to be addressed before this article is nominated as a GA.
Most attempts to graphically depict a decrease in utility would embrace quantification. I've now dropped a graph in to the “Quantification of marginal utility” section, with a caption that makes it plain that there is a quantification assumption. Attempts to depict the relationship at a higher level of generality would involve digraphs confusing to most readers.
Other possible illustrations could be pictures of some of the important marginalists. —SlamDiego←T 10:06, 22 February 2008 (UTC)
I've dropped-in some pics of economic thinkers, each by a section which mentions him. (In the section on the Marginal Revolution, I made a point of selecting three economists to represent each of the three major schools — British (Jevons), Lausanne (Pareto), and Austrian (Böhm-Bawerk).) It would be nice to have a picture of Slutsky, of Hicks, or of Allen, to illustrate the “Eclipse” section. —SlamDiego←T 10:58, 23 February 2008 (UTC)
When I was putting those pictures into the article, I accidentally copied a section header to where it certainly didn't belong. Some other editor partially corrected that (by revising the header), but I've deleted my spurious insertion altogether. —SlamDiego←T 12:46, 26 February 2008 (UTC)

[edit] Risk Aversion: Equivalence v. Implication

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)

Could I see the source for that above statement? —Preceding unsigned comment added by Extropian13 (talk • contribs) 23:41, 8 June 2008 (UTC)
Which above statement? As to the source for the claim as to how the the Wikipdia article uses “risk aversion”, see the article itself. As to the way that most mainstream texts define “risk aversion”, see any standard text that treats “choice under uncertainty”, such as Microeconomic Theory by Mas-Collel, Whinston, and Green. —SlamDiego←T 05:22, 9 June 2008 (UTC)

[edit] Misrepresenting Marxism

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.

First, you should know that the passage of interpretation to which you object was inserted by a Marxist. (You fellows trip over each other in your various interpretations and attempts to defend Marx.) Now, that prior Marxist didn't claim that the interpretation was of the quoted passage. (It might have been excised as redundant in that case.) But it's fairly easy to find exactly this interpretation in standard sources. If you want to call for a citation, it should be easy to find if someone cares to protect that sentence. —SlamDiego←T 05:35, 9 June 2008 (UTC)

[edit] An unwarranted generalization

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)

No, it's certainly neither circular reasoning nor “original research”. The immediately previous Whatley quote
It is not that pearls fetch a high price because men have dived for them; but on the contrary, men dive for them because they fetch a high price.
says much of what is said above, and the rest is simply a matter of noting the difference between marginal values and average values, and the standard economic conception of cost as forgone opportunity. (See, for example, L.S.E. Essays on Cost, edited by James M. Buchanan.) —SlamDiego←T 08:30, 9 June 2008 (UTC)

[edit] Why Was My Argument Deleted?

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)

You need to carefully read the Wikipedia policy on “original research”. A novel synthesis is not acceptable. Worse, what contributes to the novelty of your counter-argument is that it doesn't work for a relevant purpose — it doesn't rebut marginalism. Showing that the LTV could accommodate an outcome is only here of interest if marginalism could not. As it is, marginalism has a clear explanation as to why new technologies (or a change in the physical laws of the universe) could result in a lowered price for diamonds. —SlamDiego←T 05:50, 9 June 2008 (UTC)