3 ms·
I don't think that's true in the general case. For example, one penny has virtually no utility to me on its own, but there's plenty I can do with one pound, get
by IanCal 10y ago
I don't think that's true in the general case. For example, one penny has virtually no utility to me on its own, but there's plenty I can do with one pound, getting more than a hundred times the value from it.
- baddox 10y agoI don't think that's quite what people usually mean when they talk about diminishing marginal utility. Granted, "marginal" was missing from the parent comment, but I gather that was the phenomenon being discussed. Diminishing marginal utility implies that you gain more utility by acquiring your first penny than you do acquiring your hundredth. Now, at such small levels of money, you could certainly argue that almost nothing is for sale at 1 penny, but once you get above the level where the disutility of carrying around a coin is dwarfed by the utility of the money itself, diminishing marginal utility applies pretty well.
- greenshackle2 10y agoThings may get weird at the scale of pennies or billions of dollars, but at scales relevant for buying insurance or gambling diminishing marginal utility certainly holds. Losing $10k when you have $20k hurts less than losing $10k when you have $10k.