4 ms·
Is there any evidence that it is?
by duxut_staglatz 7y ago
Is there any evidence that it is?
- chewz 7y agoPretty common assumption. [1] The need for money saturates slowly. Think about winning 1000 dollars (nice dinner pehaps), 10 000 (better car), 100 000 (larger appartment), .... , 10 000 000. At some point it doesn't matter if its 200 000 000 or 300 000 000. On the other hand a lotter ticket is 1$. What is the utility of 1$ - a can of coke pehaps. But the perspective of winning $1 000 000 - thats a nice idea to hold for a few days... So many people do despite the slim chances. [] https://economics.stackexchange.com/questions/23952/is-the-utility-of-money-actually-logarithmic https://economics.stackexchange.com/questions/23952/is-the-u... [] https://www.forbes.com/sites/rogerkay/2013/08/05/how-the-marginal-utility-of-money-balances-with-value/ https://www.forbes.com/sites/rogerkay/2013/08/05/how-the-mar...
- duxut_staglatz 7y agoThat's evidence for a concave utility function wrt income, not logarithmic per se. But your first link does cite evidence that _if_ utility is CRRA, we are not far from the case where utility is logarithmic