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This is why the strict core of microeconomics never allows one to make interpersonal utility comparisons. As soon as you start to try and figure out "best" outc

This is why the strict core of microeconomics never allows one to make interpersonal utility comparisons. As soon as you start to try and figure out "best" outcomes across groups (beyond ability to pay), it gets really complicated, really quickly. This is the domain of areas like Social Choice: https://en.wikipedia.org/wiki/Social_choice_theory https://en.wikipedia.org/wiki/Social_choice_theory

gmac 6y ago
This is why the strict core of microeconomics never allows one to make interpersonal utility comparisons. Yes ... though maybe the other reason why it's not "allowed" is that it suits corporate and moneyed interests that way. There's pretty good evidence for logarithmic marginal utility of money, which is itself a pretty strong argument for redistributing most of every billionaire's wealth.
- _dps 6y ago
  > There's pretty good evidence for logarithmic marginal utility of money 1) This is, at best, controversial. Measuring cardinal utility is an unsolved, perhaps unsolvable problem. The kinds of experiments that lead to these claims are things like "what more would you buy if you had $X" or "how much, out of 10, would your happiness increase if you had $X more". Needless to say these are full of problems with self reporting, perception, lack of skin in the game, etc. The only utility-adjacent concept that can be tested rigorously is preference ordering in situations where the subject actually bears the costs and benefits of the choice. This makes most experiments you'd want to do very costly, and potentially unethical. 2) Even if we accept that everyone has a logarithmic curve describing their own utility for money, this doesn't mean you can make intersubjective comparisons. To give an analogy, it's a "units" problem. Bob's utility is measured in Bobutils, and Alice's utility is measured in Aliceutils. Even if Bobutils(dollars) and Aliceutils(dollars) are both logarithmic, this doesn't get you any closer to aggregating their utility or evaluating tradeoffs (can't add/subtract things with different units). Edit: playing minor devil's advocate to myself on point 1, it's certainly true that there's good evidence of diminishing marginal utility of money (or of anything). I was specifically responding to the kinds of experiments that lead to the claim of a logarithmic form, which I consider to have many problems.

gmac 6y ago

This is why the strict core of microeconomics never allows one to make interpersonal utility comparisons. Yes ... though maybe the other reason why it's not "allowed" is that it suits corporate and moneyed interests that way. There's pretty good evidence for logarithmic marginal utility of money, which is itself a pretty strong argument for redistributing most of every billionaire's wealth.

_dps 6y ago
> There's pretty good evidence for logarithmic marginal utility of money 1) This is, at best, controversial. Measuring cardinal utility is an unsolved, perhaps unsolvable problem. The kinds of experiments that lead to these claims are things like "what more would you buy if you had $X" or "how much, out of 10, would your happiness increase if you had $X more". Needless to say these are full of problems with self reporting, perception, lack of skin in the game, etc. The only utility-adjacent concept that can be tested rigorously is preference ordering in situations where the subject actually bears the costs and benefits of the choice. This makes most experiments you'd want to do very costly, and potentially unethical. 2) Even if we accept that everyone has a logarithmic curve describing their own utility for money, this doesn't mean you can make intersubjective comparisons. To give an analogy, it's a "units" problem. Bob's utility is measured in Bobutils, and Alice's utility is measured in Aliceutils. Even if Bobutils(dollars) and Aliceutils(dollars) are both logarithmic, this doesn't get you any closer to aggregating their utility or evaluating tradeoffs (can't add/subtract things with different units). Edit: playing minor devil's advocate to myself on point 1, it's certainly true that there's good evidence of diminishing marginal utility of money (or of anything). I was specifically responding to the kinds of experiments that lead to the claim of a logarithmic form, which I consider to have many problems.