Thread: Marginal Utility

Originally Posted by dnsmith

Goober, what you need to do is study Maslow's pyramid of the hierarchy of human needs.Attachment 13138 As man accomplishes the acquisition of the lowest rung his sights are set on the next rung. The lower the rung the more important the rung is to his survival, but it is not necessarily more satisfying after he as achieved it and his wishes are directed at the satisfaction he will derive from achieving the next rung up.

One can say with absolute certainty that Maslow's pyramid of the hierarchy can describe human behavior for an economist as well as a psychologist. I have studied both, economics and psychology to the Ed.S level which is but a few credit hours below PHD. Maybe that is why I understand it so much better than you.

I am amazed that you could get that far and not have a clue what "diminishing marginal utility" means.
Because you have looked at classic examples of diminishing marginal utility, and claimed they showed the exact opposite of what every economics teacher I ever had said they showed.
The idea that a millionaire lighting a cigar with a $100 bill, doesn't show the diminished marginal utility of a $100 bill, but you claim it shows the "Satisfaction" of lighting a cigar is equal to the satisfaction a person gets from a month's wages.

That the example of the frontiersman was to show that the satisfaction of survival was equal to the satisfaction of feeding a parrot.

unbelievable......

Originally Posted by dnsmith

All of your posts tend to be hogwash, and if you use anymore vulgarity in posts I will certainly tend to ignore them. Clean up your act if you want to discuss issues.

BTW, yes, I am quite aware that there are leftwingnut economists (who tend to use the basis of the socialist paradigm to support their opinions) and main stream economists who tend to accept the capitalist paradigm and their are rightwingnut economists who believe in the libertarian paradigm which totally eliminates government intervention in the corporate structure what so ever. I'll stick with the moderate main streamers thank you.

If you are not familiar with the socialist paradigm of which I have nothing but contempt, here it is, "The law of diminishing marginal utility provides ground for having socialism in the economy. The rich section of society has less marginal utility for a unit of money, whereas the poor section has more utility for the same amount of money, as poor have relatively less stock of money. If the money or income is redistributed in the favor of poor, the gain to the poor shall be more as compared to the loss to the rich. This process of redistribution will tend to equalize the marginal utility of poor and rich and maximize social welfare."

Sir your beliefs to me are vulgar. Seriously. In fact, you cannot even honestly compare that to a word, that you deem vulgar. No surprise. I also sense a real evil, so if you decided not to respond to my hogwash posts, as you put it, I will not be the poorer. I won't have to wash my hands after reading some of what goes through your brain.

Originally Posted by goober

I am amazed that you could get that far and not have a clue what "diminishing marginal utility" means.
Because you have looked at classic examples of diminishing marginal utility, and claimed they showed the exact opposite of what every economics teacher I ever had said they showed.

It is not my fault you didn't understand your economics teachers.

The idea that a millionaire lighting a cigar with a $100 bill, doesn't show the diminished marginal utility of a $100 bill, but you claim it shows the "Satisfaction" of lighting a cigar is equal to the satisfaction a person gets from a month's wages.

That the example of the frontiersman was to show that the satisfaction of survival was equal to the satisfaction of feeding a parrot.

unbelievable......

Satisfaction in survival is just that, satisfaction, which is furthest thing in his mind as he acquires a satisfaction further up the pyramid of hierarchy.

I'll use an example someone as dense as you can understand. My needs for survival, ie food, water, shelter are important, but once met, my satisfaction gotten from sex, though not essential for survival, gives me greater satisfaction.

Effectively Maslow is discussing people like you when he wrote, "the study of crippled, stunted, immature, and unhealthy specimens can yield only a cripple psychology and a cripple philosophy." When he discussed the hierarchy of human needs he was discussing human satisfaction and motivation of psychologically healthy humans.

Goober, Abraham Maslow's Hierarchy of Needs and diagrams of Maslow's motivational theory - pyramid diagrams of Maslow's theory

Each of us is motivated by needs. Our most basic needs are inborn, having evolved over tens of thousands of years. Abraham Maslow's Hierarchy of Needs helps to explain how these needs motivate us all.

Maslow's Hierarchy of Needs states that we must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself.

Only when the lower order needs of physical and emotional well-being are satisfied are we concerned with the higher order needs of influence and personal development.

Conversely, if the things that satisfy our lower order needs are swept away, we are no longer concerned about the maintenance of our higher order needs.

Maslow's original Hierarchy of Needs model was developed between 1943-1954, and first widely published in Motivation and Personality in 1954. At this time the Hierarchy of Needs model comprised five needs. This original version remains for most people the definitive Hierarchy of Needs.

1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc.

2. Safety needs - protection from elements, security, order, law, limits, stability, etc.

3. Belongingness and Love needs - work group, family, affection, relationships, etc.

4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc.

5. Self-Actualization needs - realising personal potential, self-fulfillment, seeking personal growth and peak experiences.

These developed over the years into:

1970s adapted hierarchy of needs model, including cognitive and aesthetic needs - free pdf diagram and free doc diagram

1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc.

2. Safety needs - protection from elements, security, order, law, limits, stability, etc.

3. Belongingness and Love needs - work group, family, affection, relationships, etc.

4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc.

5. Cognitive needs - knowledge, meaning, etc.

6. Aesthetic needs - appreciation and search for beauty, balance, form, etc.

7. Self-Actualization needs - realising personal potential, self-fulfillment, seeking personal growth and peak experiences.

and more recently into:

1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc.

2. Safety needs - protection from elements, security, order, law, limits, stability, etc.

3. Belongingness and Love needs - work group, family, affection, relationships, etc.

4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc.

5. Cognitive needs - knowledge, meaning, etc.

6. Aesthetic needs - appreciation and search for beauty, balance, form, etc.

7. Self-Actualization needs - realising personal potential, self-fulfillment, seeking personal growth and peak experiences.

8. Transcendence needs - helping others to achieve self actualization.

One could say that Warren Buffet and Bill Gates are achieving as much satisfaction from the last $30 or so billion they earned by helping others to achieve self actualization through the more basic of the hierarchy of needs.

"For example: the common broad-brush interpretation of Maslow's famous theory suggests that that once a need is satisfied the person moves onto the next, and to an extent this is entirely correct. However an overly rigid application of this interpretation will produce a rigid analysis, and people and motivation are more complex. So while it is broadly true that people move up (or down) the hierarchy, depending what's happening to them in their lives, it is also true that most people's motivational 'set' at any time comprises elements of all of the motivational drivers. For example, self-actualizers (level 5 - original model) are mainly focused on self-actualizing but are still motivated to eat (level 1) and socialise (level 3). Similarly, homeless folk whose main focus is feeding themselves (level 1) and finding shelter for the night (level 2) can also be, albeit to a lesser extent, still concerned with social relationships (level 3), how their friends perceive them (level 4), and even the meaning of life (level 5 - original model)."

Maslow is obviously most famous for his Hierarchy of Needs theory, rightly so, because it is a wonderfully simple and elegant model for understanding so many aspects of human motivation, (satisfaction, and utility).

Originally Posted by dnsmith

One could say that Warren Buffet and Bill Gates are achieving as much satisfaction from the last $30 or so billion they earned by helping others to achieve self actualization through the more basic of the hierarchy of needs.

"For example: the common broad-brush interpretation of Maslow's famous theory suggests that that once a need is satisfied the person moves onto the next, and to an extent this is entirely correct. However an overly rigid application of this interpretation will produce a rigid analysis, and people and motivation are more complex. So while it is broadly true that people move up (or down) the hierarchy, depending what's happening to them in their lives, it is also true that most people's motivational 'set' at any time comprises elements of all of the motivational drivers. For example, self-actualizers (level 5 - original model) are mainly focused on self-actualizing but are still motivated to eat (level 1) and socialise (level 3). Similarly, homeless folk whose main focus is feeding themselves (level 1) and finding shelter for the night (level 2) can also be, albeit to a lesser extent, still concerned with social relationships (level 3), how their friends perceive them (level 4), and even the meaning of life (level 5 - original model)."

Maslow is obviously most famous for his Hierarchy of Needs theory, rightly so, because it is a wonderfully simple and elegant model for understanding so many aspects of human motivation, (satisfaction, and utility).

Did they achieve as much satisfaction with the last $100,000 they earned as the first time they earned over $100,000 in a single year? Or did the marginal utility diminish as their income increased?

Originally Posted by goober

Did they achieve as much satisfaction with the last $100,000 they earned as the first time they earned over $100,000 in a single year? Or did the marginal utility diminish as their income increased?

I can't answer that, and neither can you. Only Bill Gates can answer that question. Satisfaction is an individual issue, not one for some outsider to use in the attempt to justify higher transfer of wealth to others.

You are still using the socialist paradigm which tries to make those judgments for others who make more money.

Time for supper, bye. I'll get back to you when I can.

I'm pretty sure Bill Gates and Warren Buffet don't even blink when their wealth fluctuates by $100,000, which happens about every second on trading days. It would not be possible for a human to respond to that minor of a fluctuation that often 5 days a week.

Originally Posted by dnsmith

I can't answer that, and neither can you. Only Bill Gates can answer that question. Satisfaction is an individual issue, not one for some outsider to use in the attempt to justify higher transfer of wealth to others.

You are still using the socialist paradigm which tries to make those judgments for others who make more money.

Time for supper, bye. I'll get back to you when I can.

Well, you can't because you don't understand economic principles, but I can assume that the last $100,000 that Bill Gates made did not have the utility of the first $100,000 he made when he started Microsoft, because I am familiar with the science of economics, I am not limited to what I can google between posts, I have actually studied it, and I remember a good deal of it.

Originally Posted by Disillusioned_1

I'm pretty sure Bill Gates and Warren Buffet don't even blink when their wealth fluctuates by $100,000, which happens about every second on trading days. It would not be possible for a human to respond to that minor of a fluctuation that often 5 days a week.

They don't have to respond to each fluctuation, they only need to get satisfaction from knowing its coming. Then they get even more utility by giving it to people who need it more.

Originally Posted by goober

Well, you can't because you don't understand economic principles,

No, I can't answer it because I don't know their minds, only what a study of human behavior can presume by historical implicationsof data.

but I can assume that the last $100,000 that Bill Gates made did not have the utility of the first $100,000 he made when he started Microsoft, because I am familiar with the science of economics, I am not limited to what I can google between posts, I have actually studied it, and I remember a good deal of it.

Actually can't, because you don't and your memory is way off the point. Its like the $100 bill and the cigar. You can't tell me which had more satisfaction, knowing he could afford to light the $500 to $750 with a $100 bill or the expensive cigar he will enjoy smoking. It doesn't really matter because all theories of economics that don't follow the socialist paradigm give him the right to enjoy his own satisfaction without a bunch of socialist trying to take his money in a transfer of wealth.

Originally Posted by dnsmith

No, I can't answer it because I don't know their minds, only what a study of human behavior can presume by historical implicationsof data.Actually can't, because you don't and your memory is way off the point. Its like the $100 bill and the cigar. You can't tell me which had more satisfaction, knowing he could afford to light the $500 to $750 with a $100 bill or the expensive cigar he will enjoy smoking. It doesn't really matter because all theories of economics that don't follow the socialist paradigm give him the right to enjoy his own satisfaction without a bunch of socialist trying to take his money in a transfer of wealth.

You still haven't found a single reference that says "The marginal utility of money may rise with income", have you?

Originally Posted by goober

Did they achieve as much satisfaction with the last $100,000 they earned as the first time they earned over $100,000 in a single year? Or did the marginal utility diminish as their income increased?

Of course they achieved greater satisfaction with the first 100k than the last 100K if they gained great wealth between the two. Common sense, that we can all observe within ourselves. This is a no brainer, period. If there were an individual that actually got as much pleasure from the last 100K, he would be an anomaly, and quite mentally ill.

Is DNS actually trying to argue against this? Seriously argue, instead of just entertaining himself in his retirement as I tend to do here? I mean, is he serious in his contention the satisfaction doesn't decrease? And that if one believes in the decrease, that makes one some sort of socialist? I think it makes one intelligent to understand the ways of the human mind and its pursuit of pleasure, satisfaction. And to understand the mind without using someone elses concocted theory, but rather understanding through observing ones self with no theory as a filter, a lattice work. Which makes me wonder if there are right wing psychological theories too? If not, there will be, soon enough.

I was thinking just yesterday at how we view history is being changed by the right side boys. For instance when I was in school in the 50's FDR was lauded in school, and held in high regard. People on the street held him in the same manner. Today that isn't the case at all. What changed? Is it coincidental that with the return of conservatism to power they got real busy rewriting history, rewriting how we view certain men? It does seem so. I have watched it happen.

There seems to be accepted facts for many decades, and the return of a group sees a change in facts and attitudes. Which makes facts relative. And that is kinda scary. If facts can be changed so easily......it means the american people are really dumb on some levels. Is it attributed to nothing more than clever propaganda? That does seem to be the case. Right wing propaganda that appeals to the baser side of human nature. Like sex, it sells.