Talk:Marginal utility

Economizer's changes

An individual will typically be able to partially order the potential uses of a good or service. For example, a ration of water might be used to sustain oneself, a dog, or a rose bush. Say that a given person gives her own sustenance highest priority, that of the dog next highest priority, and lowest priority to saving the roses. In that case, if the individual has two rations of water, the marginal utility of either of those rations is that of watering the dog. The marginal utility of a third gallon would be that of watering the roses.

with

An individual will typically be able to partially order the potential uses of a good or service. The marginal utility of a thing is its least useful application in satisfying the wants of a person. For example, a ration of water might be used to sustain oneself, a dog, or a rose bush. Say that a given person gives her own sustenance highest priority, that of the dog next highest priority, and lowest priority to saving the roses. In that case, if the individual has two rations of water, the marginal utility of either of those rations is that of watering the dog. If the individual has three rations of water, the marginal utility of ~~a third gallon~~ any given ration would be that of watering the roses. Therefore, as the supply of water increases a given ration of water is worth less and less to the individual. As a result, he is willing to part with one ration of water for something less useful to him in exchange than he would if he had less water. But, unless he acts altruistically, he will only part with a ration of water for something that is more useful in satisfying his wants than that ration of water. This is why, if it is assumed the individuals seek to maximize their own gain in trade, trade is mutually beneficial. This is because, barring mistaken predictions on the usefulness of things, both individuals who trade receive something more useful in satisfying their wants than that which they give in exchange.

Well:

The first insertion is a somewhat careless definition of “marginal utility”. A careful definition was provided at the beginning of the article.
The section change (concerning the third gallon) isn't particularly objectionable, but loses the notion of change.
The next sentence (“Therefore … a given ration of water is worth less and less”) basically treats the “law” as if it really is a law; and it teeters in the brink of sneaking-in neoclassical presumptions.
The next sentence (“As a result, he is willing … in exchange”) rushes us into the issue of marginal rates of substitution prematurely. These are covered further along, and they are not themselves part of the “law”. (Diminishing MRSs do not require that all goods and services obey the law.) Also, the wording is gender-biased.
The next sentences (“unless he acts altruistically”) is just awful. Altruism does not represent acting contrary to one's priorities. Altruism simply represents having different priorities. The “law” will work if one gives highest priorities to the rose bushes, next to the dog, and last to oneself; it will work if one gives more priority to one's neighbor; &c.
The next sentence (“This is why”) continues the error of the previous sentence. The “law” doesn't care what one's priorities are, so long as one has priorities of some sort!
The last sentence (“This is because”) rushes-off to discuss trade. This section is not the place for it; this article is not the place for it. A good article on trade could discuss the point that individuals will only trade if the expect the trade to advance the objectives (egoistic, mutualistic, altruistic, or whatever) to which they give priority.

—SlamDiego 03:31, 10 March 2007 (UTC)[reply]

To trade altruistically is to trade without self-interest. It is to be fine with trading to receive something less useful by trading away something more useful. Marginalism assumes people seek to acquire things that are useful in satisfying their wants; they won't sacrifice something more useful in order to receive something less useful. About "the third gallon," it's ANY GIVEN GALLON that the marginal utility is decreased. It doesn't matter which one you pick. That's the poing of that edit. Economizer 03:38, 10 March 2007 (UTC)[reply]

Again, you are very wrong. You've confused the concept of usefulness with that of egoistic gratification. For an egoist, indeed a particular sort of gratification may be the ultimate measure of utility; but the concept of usefulness obtains no matter what one's priorities might be, and hence the concept of marginal utility obtains. Marginalism does not itself make any assumption of egoism; some marginalists did; others avoided making this unnecessary assumption. (And even if every marginalist had made that assumption, this article is about marginal utility itself, and would have to work out the peculiar implications of mutualism and of altruism if it needed to work-out the implications ofr egoism.)

I understood the point of your change w.r.t. the third gallon, which is why I said that the change wasn't particularly objectionable. —SlamDiego 03:53, 10 March 2007 (UTC)[reply]

"Usefulness" toward what end? Think about it. "Usefulness" doesn't mean anything by itself. When we talk of usefulness or utility in economics we are talking about usefulness toward satisfying the wants of any given person. The assumption in marginalism is that people seek to maximize the satisfaction of their wants. Therefore they seek to acquire things that are productive toward that end and as much of those things as possible up to the point where the usefulness in satisfying wants starts decreasing. Economizer 04:26, 10 March 2007 (UTC)[reply]

If people don't seek to maximize their well-being, then marginalism is useless. It would serve no purpose whatsoever. Marginalism is based on the observation of human behavior that they seek to maximize their own well-being. It can't be alienated from that. Economizer 04:44, 10 March 2007 (UTC)[reply]

The person who needs to think here isn't I. No matter what the ends, resources have or lack usefulness with respect those ends. So long as ends can be prioritized, resources have marginal usefulness. Unless you're going to trivialize the notion of “the wants of any given person” so that an altruists wants are said to be the well-being of others, and so forth, you are merely begging the question by assuming that utility must be w.r.t. one's own wants. (And, if you do trivialize the notion, then your giving away the argument.)

An assumption of marginalism is indeed that people prioritize — that's the same thing as maximizing — but marginalism doesn't care what their priorities might be. Without any assumption of egoism, marginalism gets downward sloping demand curves, upward sloping supply curves, &c.

In point of fact, you are making one of the fundamental mistakes of vulgar critics of marginalism, who think that, by attacking egoism, they can refute marginalism. —SlamDiego 04:48, 10 March 2007 (UTC)[reply]

I'm not critical of marginalism. I agree with it fully. Again, "usefulness" does not mean anything by itself. Useful for WHAT? Economizer 04:53, 10 March 2007 (UTC)[reply]

Citation

Don't confuse citing an author who agrees with you with citing proof that you're right. All sorts of things have been said about marginalism, some of which I promise you even you would see were patently false. A simple disproof of this claim of egoism is in examination of the assumptions of Menger; you can find them distilled in the article by Georgescu-Roegen or that by McCulloch. You won't find egoism in there. —SlamDiego 04:48, 10 March 2007 (UTC)[reply]

I don't trust your understanding of marginalism. I've given a source and it is more reliable than your word. Marginalism would not apply if individuals sought to decrease their well-being or didn't care one way or the other. Economizer 04:51, 10 March 2007 (UTC)[reply]