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Diminishing marginal utility is an axiom over fixed magnitude amounts of a good. Bill Gates still gets less out of an additional $10 even with new opportunities
by nonameiguess 5y ago
Diminishing marginal utility is an axiom over fixed magnitude amounts of a good. Bill Gates still gets less out of an additional $10 even with new opportunities for philanthropy than a panhandler who is hours from starving to death and currently has $0. "Diminishing" doesn't mean it has to go to zero, but Bill Gates is not going to be in any situation where some number of dollars given to him on top of what he has means the difference between life and death.
Heck, this exact fact is the very reason why Bill Gates engages in philanthropy. He realizes that other people need the money more than he does.
- giantg2 5y agoYes, but that wasn't what was explained. "Money also has diminishing marginal utility, so as you accumulate more of it, at some point it has less use." The additional money does not have less use. It's just not going to add as much to quality of life or dictate "life and death". There are still many uses for it, so of which may not be possible with lower amounts.
- ttt333 5y agoIf you consider "add to quality of life" a synonym for marginal utility I think you may be in agreement. Yes, $10 buys the same Mcdonald's lunch regardless of how much money one has, but two people, one with $0 and one with $1bn in net worth will be excited about that lunch to very different degrees.
- giantg2 5y ago"Money also has diminishing marginal utility, so as you accumulate more of it, at some point it has less use." This thread in response to this, to point out that the use of money is not the same as the marginal utility.