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> usually positive Is there an example of a voluntary transaction where the expectation is negative?

• ucaetano 10y ago
  Yes, gambling for small wins can be negative, if you don't include the "excitement" or "entertainment" in the utility function. But then you're not talking about a pure monetary transaction. More like a trade. Which goes back to your point: nobody makes a voluntary transaction where they get less value than they provide. Take charity donations, for example: people value the warm feeling from helping others and a clear consciousness more than the money they are giving.
  • deleted 10y ago
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• anonymoushn 10y ago
  Sure, for example buying heroin. You have to get through a few steps to agree though! You could disagree by saying that people's "revealed preferences" are their "actual preferences", or by saying that people's utility function after accounting for hyperbolic discounting is their "actual utility function."
  • baddox 10y ago
    Of course in the case of heroin addiction it's easy to poke fun at the notion of time-discounted utility functions, but you can't really shrug off the idea, since it's vital to explaining why people do all sorts of immediately neutral or unpleasant things like brushing their teeth, saving money, or exercising.