Talk:Marginal utility

my review of the article

I've read the history of the article, and it strikes me that so many editors (most of them with good achievements in Wikipedia) can't agree on such a known subject in economics. I hope that we can bring this to Good article nomination (as soon as the edit wars stop). Here is my modest take on reviewing the body of the article. By the way, I am a neoclassical orthodox economist with a little knowledge of the Austrian view (basically, I read and studied the McCulloch 1977 article that is cited in the history of this talk page).

• Marginality

I have no complaint on this section. It is clear and accurate. Orthodox theory do consider marginal changes to be inifinitesimal.

• Diminishing marginal utility

"An individual will typically be able to partially order the potential uses of a good or service. For example, a ration of water might be used to sustain oneself, a dog, or a rose bush. Say that a given person gives her own sustenance highest priority, that of the dog next highest priority, and lowest priority to saving the roses. In that case, if the individual has two rations of water, then the marginal utility of either of those rations is that of sustaining the dog. The marginal utility of a third unit would be that of watering the roses".

Under orthodox theory, it is not necessary to give different uses to the marginal change of a good or service, so this paragraph may be revised to be more general. In fact, I believe that the word diminishing was first used to reflect the fact that: i) there was a psychologycal saturation after consuming the marginal change, and ii) there was an arithmetical change that was negative in the cardinal utility of the individual. Later, when the discipline moved towards ordinality, the term diminishing lost any psychological interpretation (an equivalent utility function could give you now a positive second derivative) but instead got clouded under several assumptions about satiability, convexity, and etc (what us orthodox call primitives). I think that when people in the early 20th century refer to a diminishing marginal utility they meant the british or marshallian approach (the one where it doesn't matter what ordering you give to potential uses), even though Menger had a lot of notability with his examples of farmers giving different ordered uses to goods (only that mainstream textbooks just said: hey, Menger did the same as Marshall, except that he used non-mathematical examples).

"(The diminishing of marginal utility should not necessarily be taken to be itself an arithmetic subtraction. It may be no more than a purely ordinal change)".

This argument is supported with references from 1968 and 1977 (wich are reliable, no doubt), but I think they push some Point of View (POV). Here is the semantic trouble as I see it: Austrian had an excellent and original definition of hierarchical-uses-of-descending-importance which McCullochs' article calls diminishing marginal utility, BUT this was in 1977 and so it conflicts with the orthodox definition that got into mainstream since Marshall years (c.1890). So we have a case where a better theory borrowed the term diminishing marginal utility when they actually refer to hierarchical-uses-of-descending-importance. The keyword is diminishing: utility (orthodox utility) actually diminishes (as in going from 10 utils to 9 utils), whereas uses (austrian uses) just descend in the scale of importance, so no quantity is diminishing here. The problem is semantic, because it's not, strictly speaking, the same concept. Later in his article, McCulloch explains that, as an extension to the formalization he is providing, a numerical index can also be attached to the austrian approach (even though it is not necessary for it to work).

"(...) the concept and logic of marginal utility are independent of the presumption that people pursue self-interest.[17] For example, a different person might give highest priority to the rose bush, next highest to the dog, and last to himself. In that case, if the individual has three rations of water, then the marginal utility of any one of those rations is that of watering the person. With just two rations, the person is left unwatered and the marginal utility of either ration is that of watering the dog. Likewise, a person could give highest priority to the needs of one of her neighbors, next to another, and so forth, placing her own welfare last; the concept of diminishing marginal utility would still apply".

I agree with this one. Self interest enters orthodox microeconomics only to the extent that people make choices based on the maximization of their own utility functions, there is nothing in the "primitives" or assumptions-preference-orders that explicitelly mandates people to be egotistic.

Finally, the history section is what I like the most. It is well balanced, rich in facts, neutral POV, and well written and illustrated. So, in conclusion, I think that the article is excelent in its current state, except that for some parts of it, marginal utility needs to be divided into two: there is a british marginal utility, and an austrian marginal utility, and they are not strictly the same concept. Unfortunately, to label the former two in a different way would be original research. I don't agree with the view of the main editor who says that general = austrian and specific = orthodox (a view that ultimately reflect on the discussion over the lead): the article is about a not-so-good theory (the british one, let's admit it) that has taken for its own the concept of marginal utility, on the other hand, the austrians have a good theory that is not based on the exact same concept. In other words, history has given prominence to the marginal utility of the british, but many years later, austrian realized that they had: i) polished the concept of marginal use that magically wraps everything together; and ii) formalized their ideas in a way that made everithing quantifiable and thus, more comparable to the british-orthodoxy, and now the two things are making its definition a mess.--Forich (talk) 01:52, 15 January 2010 (UTC)

I'll respond to some specifics here:

“Under orthodox theory, it is not necessary to give different uses to the marginal change of a good or service”

You're missing an essential point here: It is never possible to give identical use to two marginal changes. When, in everyday speech, we speak of two uses being the same, we really mean that mutatis mutandis. The posterior change is in a different context, established by the prior change and any changes in-between whichever two are noted. Now, presentations of orthodox theory usually skip-over why it should be that marginal utility would change, simply presuming that it does for unstated reason. But when a mainstream theorist does provide a rationale (typicaly as a result of being pressed by a student ;) ), he or she will in fact fall to discussing uses, and reach for the fact, for example, that putting a second glass of water into a stomach that already has a first glass in it is doing something different. (The sort of psychological saturation that you mention below is likewise a result of prior use changing context so that identical subsequent use being impossible.) And, when the Austrian School explicitly refers to uses, it isn't excluding things such as eating a second candy bar.

“I believe that the word diminishing was first used to reflect the fact that: i) there was a psychologycal saturation after consuming the marginal change, and ii) there was an arithmetical change that was negative in the cardinal utility of the individual.”

Walras was very explicit in rejecting hedonic notions, though he did indeed assume that utilité (very simply, usefulness) was quantified. So your conjecture of the notion of diminishing marginal utility excludes not just one but two of the three first-generation preceptors of the Marginal Revolution. The essential problem for your conjecture here is that all three of the first-generation preceptors were not simply talking of something that was subsequently labelled “marginal utility”, but they were invoking a principal that came to be called “diminishing marginal utility”, and they at least agreed that on some level, they were writing about the same thing. I'll return to that issue of what the same thing is below.

By the way, economists didn't begin to use the phrase “diminishing marginal utility” until after they'd begun using the phrase “marginal utility”, which they got by way of translating a work from the second generation of the Austrian School.

“I think that when people in the early 20th century refer to a diminishing marginal utility they meant the british or marshallian approach”

No. That's certainly what the vast majority of the British meant, but they'd not yet displaced the Lausanne and Austrian Schools in the rest of Europe. (The Austrian School flourished there until the rise of Nazism.)

“Menger had a lot of notability with his examples of farmers”

I believe that the example that you have in-mind was from Böhm-Bawerk.

“I don't agree with the view of the main editor who says that general = austrian and specific = orthodox”

The principal issue here is mathematical. If one is to locate the sameness amongst what Jevons, Menger, and Walras (and then later figures such as Ramsey and Arrow) were discussing, we must strip away the distinct elements and see what remains. A quantification is a special case of a total ordering (which, in turn, is a special case of a partial ordering). The Austrian School was talking about elements of the feasible set to which a total ordering of desirability could be applied; Jevons and Walras about elements of the feasible set to which a quantification of desirability could be applied; those quantifications imply a total ordering, and thereïn is a sameness. Likewise, the arithmetic differences between total quantified utilities are mathematically special cases of orderings amongst changes of goods or of services.

As I've noted, Walras used a term which, for him, simply meant usefulness. Meanwhile, Bentham &alii hadn't arbitrarily grabbed the word “utility”, which had meant usefulness, for a different concept; they simply though that they had identified true usefulness. And not only did “utility” mean usefulness before those who believed in an hedonic calculus applied to to pleasure or the relief of pain, but it retains that meaning in everyday speech.

Now, the article doesn't declare that the Austrian School conception as such is the generalization; but when conceptions are stripped of peculiar notions of utility (hedonism and quantification), to hold only that which is the same across various notions, indeed the result is indistinguishable from the Austrian School notion.

“the history section is what I like the most. It is well balanced, rich in facts, neutral POV, and well written and illustrated.”

Thanks. In fact this section is one of those (so far) least affected by other editors, and my efforts there were driven by exactly the same spirit as drove my efforts in other part of the article. —SlamDiego_←T 04:35, 15 January 2010 (UTC)

:"I believe that the example that you have in-mind was from Böhm-Bawerk".

You're right, I meant Böhm-Bawerk, sorry. --Forich (talk) 01:11, 20 January 2010 (UTC)

:"and they at least agreed that on some level, they were writing about the same thing."

It is either "same subject, different approach", in which case the subject is broader (e.g. decision theory), or it is what I "conjectured": "different subject, different approach, similar applicability"; where one subject is "ranked uses of goods that may or may not derive in a utility function" and the other is "ranked preferences over goods which must derive in a utility function". The first subject is Austrian's marginal utility, and the second is neoclassical economists'. --Forich (talk) 01:11, 20 January 2010 (UTC).

The first and second generations of the Marginal Revolution didn't simply agree that they were addressing the same or similar problems; they agreed that at some level it was the same solution. The article can, should, and does treat the subject at a level where they are indeed all the same. Ranked preferences are based on use; if we ask a mainstream economist what will happen to the preference ordering of a good or of a service and why it will happen should a new use be discovered or an old use be somehow lost, he or she will not stand there helpless, but be able to explain. And rankings to which quantification in your sense must be applied are a special case of rankings more generally. The operations on quantities not something instead of any operations on rankings, but special cases of operations on rankings. The article also notes how their more specific notions (and the present mainstream notion) of utility differ, and how the popular special case assumptions of quantification, continuity, and differentiability of utility affect the notion of marginal utility and of diminishing marginal utility. —SlamDiego_←T 02:20, 20 January 2010 (UTC)

Slamdiego, let me return to the issue of what people perceived marginal utility was, at the beginning of the 20th century, using this quote from Davenport (1902, p. 361):

"Acquiescence in the term utility carries with it also an acceptance of marginal utility. Entirely aside from any question as to the dubious purposes to which this second term has been subjected in economic discussion, it is clear that it stands for an actual fact in individual experience. Its best illustration is found in the falling intensity of the desires of any individual for any given sort of commodity at any given point of time. Succesive increments of supply call forth a continually diminishing response of desire". The reference is Davenport, H. (1902). "Proposed modifications in Austrian theory and terminology". Quarterly journal of economics 16(3): pp. 355-384.

In my opinion, austrians did coined the term marginal utility(it is a fact you and others have demonstrated, even though the notion arises in earlier work by Bernoulli), but the definition of the quote above took over the original austrian definition, and since then (1902, at least) the british approach to marginal utility has reigned as THE most popular definition, and as such, it should be treated in the lead section of an encyclopedic article on the subject.--Forich (talk) 01:59, 27 January 2010 (UTC)

Forich— First, let me acknowledge the excellence of your investigating some of the relatively early literature. But you're referring to an English-language author. And though utility had come to refer to an intensity of desire amongst most of the English-speaking economists at about the time that Davenport was writing, and figures such as Davenport (and Edgeworth before him) thought there was an sound basis in introspection for this conception, that conception was part of what led to a collapse in support for utility theory amongst English-speaking economists. (See Stigler's “The Development of Utility Theory”, originally in JPE, 1950, but since reprinted at least a few times.) Utility made a come-back amongst the mainstream of these economists in the '40s and '50s when it was divorced from references to introspection and to desire. See, for example, the treatment of utility in Kreps's A Course in Microeconomic Theory; he doesn't identify utility as any more than a quantification that fits preferences. (BTW, if you've not read Kreps, then you'll probably really enjoy at least the earliest parts of his book.) The whole reason for all the discussion about monotonic or affine transformations is because the notion of intensity of desire is no longer entailed.

More importantly, ledes should not make views appear wrong or incoherent ex definitione unless they somehow truly are. The lede does make plain

Under the mainstream assumptions, the marginal utility of a good or service is the posited quantified change in utility obtained by increasing or decreasing use of that good or service.

But there is a persistent tradition, which played a major rôle in the Marginal Revolution, that has operated without the assumption of quantification.

(And if you enjoyed that article by Davenport, then see also his The Economics of Enterprise, 1913. Lots of good stuff in there, though I am more sure of the notion that you would enjoy Kreps.) —SlamDiego_←T 04:33, 27 January 2010 (UTC)

SlamDiego, thanks for your observation on my use of sources, I do have access to some good material, but I don't have with me the Kreps textbook you mentioned (I do like his work). What is utility? That's the key question. I feel it is important to strip these terms of the unnecessary technicalities of the ortodox textbooks as it will pay off for the general public (but it is a real challenge). You said in some earlier comment:

"Walras used a term which, for him, simply meant usefulness. Meanwhile, Bentham &alii hadn't arbitrarily grabbed the word “utility”, which had meant usefulness, for a different concept; they simply though that they had identified true usefulness. And not only did “utility” mean usefulness before those who believed in an hedonic calculus applied to to pleasure or the relief of pain, but it retains that meaning in everyday speech.".

I think we agree that "utility" has received at least four different meanings : i) in everyday speech, it is the degree of usefulness of something; ii) in hedonism and benthamism, it is the exact measure of pleasure or pain; iii) in neoclassical economics (with the right mathematics ;) ), it is some kind of index that maps ordered preferences into the scale of real numbers, simultaneously preserving a few relevant assumptions; iv) in austrian economics, it is "a position on this scale of wants (scale of wants = subjective rank-ordering of the set of all wants which arranges them in the order of their importance to the individual" (McCulloch 1997, p. 250). Based on which one of the former definitions of utility, are we going to write the definition of marginal utility? It seems you know well the economic thought held by the first, second, and third generations of marginalists, could it be that they are treating ambiguously the definition of "utility"? If thats the case, we are screwed, and Wikiproject Videogames will continue to kick our ass, ;) --Forich (talk) 01:53, 29 January 2010 (UTC)

Haha! Well, I think that there is generally some degree of ambiguity in early thinking in most sciences, and certainly in economics. Consider, for example, the distinction between marginal productivity and economy of scale. Economists were confusing these two for centuries, and it was only when Wicksteed finally went at it in the 20th Century that someone clearly disentangled things. (And, of course, there was a lag between Wicksteed's discussion and the rest of the profession catching-up.) But what I am arguing is that the different conceptions of utility did have a shared content (as well as distinctive assumptions and presumptions), and that this shared content is actually what gets the major results across all of these schools. The fact that the Benthamites thought that the true measure of utility was pleasure or the removal of pain wasn't what got Jevons diminishing marginal utility and the application thereof to decision-theory, and the fact that he, the Walrasians, early neoclassicals, and more recent neoclassicals ascribed quantity really just helped them to impose ordering. (The last evidently recognize this, in their reference to “ordinal” utility, though few of them recognize the unfortunate side-effect of ruling-out some economically rational orderings.) —SlamDiego_←T 04:23, 29 January 2010 (UTC)

Also, the lead section currently looks like this: "In economics, the marginal utility of a good or service is the utility gained (or lost) from an increase (or decrease) in the amount available of that good or service". I think it is not a complex definition, and it is verifiable BUT it has circularity: "the marginal utility is the utility...". Think about it, if we were defining "black swan" like this: "black swans are swans that that do not emit or reflect light in any part of the visible spectrum", a casual reader (with no previous knowledge of swans) won't be able to recognize a black swan when he sees one! Same for our current definition of marginal utility. --Forich (talk) 01:53, 29 January 2010 (UTC)

Ah, well, I don't agree that this is circular, though I do agree that it presumes some prior knowledge of the concept of utility, just as defining “black swans” as a sort of swan presumes a prior concept of swans. But likewise, defining “swan” in terms of “bird” presumes a prior knowledge of that term. Every true definition presumes some knowledge of prior terms, until one gets to “ostensive definitions” (exposing people to elements of a set while naming the set). I can well understand the desire to remove any unnecessary reference to such prior terminology, but my earliest efforts to write a more Ockhamistic definition resulted in some pretty strong denunciations of the results. But if you think that you can produce a definition of marginal utility that will not, in fact, use the term “utility” or a synonym, will not leave readers more baffled, and will not result in even greater conflict with other editors, then I'd be happy to discuss it. But my own view is that the best solution is to have a section below which discusses the relevant meaning(s) of “utility”. —SlamDiego_←T 04:23, 29 January 2010 (UTC)

Criticisms moved to proper position

First, apologies for not using whatever the correct format here might be. I've never used a Wikipedia talk page before. Regardless, the first two examples, particularly the first, don't seem to work very well.

"bed sheets, which up to some number may only provide warmth, but after that point may allow one to effect an escape by being tied together into a rope;" (This relies on a great deal of assumptions proving true, among them being there is be somewhere to store the extra sheets, something stable to tie them to, the sheets presently in use being somehow unfit for the same purpose, and the person in question having adequate enough knowledge of knots to tie knots that will bind the sheets together without them slipping loose as they are supporting the person's weight and dropping him or her to his or her injury and/or doom. In short, this example of increased utility is a little bit ridiculous. Perhaps it should simply state having spare sheets could prove useful if the temperature drops lower than is normal or, of course, if a guest spends the night.)

"tickets, for travel or theatre, where a second ticket might allow one to take a date on an otherwise uninteresting outing" (If the outing would prove uninteresting, the the first ticket provides no additional utility and the possible utility given by the second seems very uncertain, meaning a situation that gives negative utility might or might not actually provide some utility if one had a second ticket. Perhaps instead the situation can be: You have two tickets to a show/exhibit/whatever you have only mild interest in but your date, whose company you greatly enjoy, has been eagerly anticipating. In this situation the second ticket allows you to greatly increase your utility by bringing your date to what would otherwise be a mediocre evening.)

Just a suggestion.

-Anonymous contributor on March 12, 2010 7:30 AM (-6 UTC) —Preceding unsigned comment added by 75.57.181.33 (talk) 14:00, 12 March 2010 (UTC)

Why not continue the spirit of your criticisms by objecting to the presumption that it isn't social convention to dismember people found in possession of theater tickets, &c? Why not extend similar criticisms to the remaining examples — for example, it is presumed that the bacteria are pathogens, rather than symbiotes, that people don't want disease, &c?

This article is not on tipping points, and the purpose of these examples is not themselves to give an exacting statement of just when tipping points exists, but to quickly show the reader that the “law” of diminishing marginal utility isn't really a law of the same sort as, say, conservation of mass/energy. —SlamDiego_←T 21:24, 12 March 2010 (UTC)

There is no problem with tipping points, since all available bed sheets in case of an escape will have the same value (measure of utility) for an escapee. You can't secure an escape if you come short of any single one of your bed sheets, so there is neither increase nor decrease in marginal utility with an additional unit required for a flight. In fact, it is meaningless to speak about the law of diminishing marginal utility in all these cases (tickets, antibiotics, whatever) because they are distinctly out of scope of this law. Simply put, those who propose such examples as a proof of inconsistency of this law just don't understand what this law is actually about Deisik (talk) 20:30, 14 July 2011 (UTC)

I undid your recent changes. Frankly, I can't understand what you wrote there, so it needs at least re-phrasing. I imagine it would be best to work out that phrasing here on the talk page first. I also have a bit of trouble following what you say above. The material you replaced appears to be based on a sensible interpretation of the idea of diminishing marginal utility. If it's not, could you reference a source which demonstrates why not? CRETOG8(t/c) 17:07, 20 July 2011 (UTC)

See The Law of Marginal Utility chapter in Mises' Human Action — Preceding unsigned comment added by Deisik (talk • contribs) 19:31, 21 July 2011 (UTC)

Regarding the comment you mention my point is that once the person in question has all the bed sheets required for an escape there is no difference in utility between them. Up to this point there is no room for the law of marginal utility and it is Gossen's first law that is inconsistent here Deisik (talk) 20:04, 21 July 2011 (UTC)

marginal utility

The marginal utility of a consumer is directly related to its demand curve.Discuss —Preceding unsigned comment added by 41.155.22.128 (talk) 18:59, 24 August 2010 (UTC)

Confusing sentences

I find this sentence confusing:

Constraints are conceptualized as a border or margin.

As an informed reader, it seems to me that this sentence is trying to explain the meaning of the word 'marginal'. If I were uninformed about the topic, I would be asking myself 'conceptualized by whom?', or 'what for?' or 'what does conceptualized mean in this context?'

Also, the following sentence is misleading:

The location of the margin for any individual corresponds to his or her endowment, broadly conceived to include opportunities.

That's misleading because economists sometimes speak of the 'marginal utility' associated with consumption levels not corresponding to the endowment. For example, using standard neoclassical terminology, we might speak of a consumer with a smoothly differentiable utility function U(C), decreasing marginal utility, endowment equal to 10, and a bliss point at 5. Such a consumer would choose C=5 because marginal utility equals zero at that point. But in this example, we are discussing marginal utility at a point that does not correspond to the endowment.

These sentences should therefore be rewritten for greater accuracy and clarity. Rinconsoleao (talk) 10:44, 8 September 2010 (UTC)

"The concept of marginal utility played a crucial role in the marginal revolution of the late 19th century, and led to the replacement of the labor theory of value by neoclassical value theory in which the relative prices of goods and services are simultaneously determined by marginal rates of substitution in consumption and marginal rates of transformation in production, which are equal in economic equilibrium."

Where did the replacement take place? In the minds of economists?

I didn't write that bit, but yes, it refers to the replacement of the labor theory of value as the main theory of value accepted by mainstream economists.Rinconsoleao (talk) 19:11, 3 November 2010 (UTC)

Given that the article goes on to further point out that Marx wrote Das Kapital after the marginal revolution is thought to have begun, it seems odd to have the article begin with a sentence that gives a different impression. 198.204.141.208 (talk) 18:00, 3 November 2010 (UTC)

The labor theory of value far precedes Marx. It's the theory of value used by Ricardo (and Adam Smith, too, as far as I know). So the dates mentioned are perfectly compatible.Rinconsoleao (talk) 19:07, 3 November 2010 (UTC)

Misleading link to Measure (mathematics)

This page speaks of some theories of utility being 'quantified', meaning that these theories associate different levels of utility with different real numbers. That is not the same thing as saying that utility is a measure, in the sense of the mathematical field called 'measure theory'. In that theory, a measure is a very specific type of function that maps sets into real numbers and has several special properties. Saying that utilities are described by numbers, and can even be added, subtracted, and so forth is not the same as saying that the utility function is a measure. (When we calculate expected utility by adding or integrating utility with respect to a probability, this probability is a measure, but the utility function itself is not a measure.)

Therefore, as I argued some time ago, the link to Measure (mathematics) is misleading. That link should be eliminated, and therefore the term 'quantified' should be defined with different wording.

The following are the relevant (as far as I can tell) comments from this archived discussion. Rinconsoleao (talk) 15:28, 8 September 2010 (UTC)

I would appreciate it if you could clarify further. If U(x) is a neoclassical utility function (or a list of the numbers associated with a complete neoclassical ranking by order of preference), what is it a measure over? Are you asserting that it is a measure over the space of goods x? Or are you asserting that it is a measure over the space of 'utilities' u? Or are you asserting something else? --Rinconsoleao 09:54, 9 August 2007 (UTC)

Neoclassical economics defines a utility function as a mapping, with certain properties, over real numbers. It would be empty, in neoclassical economics, to call this a mapping over utilities, as utilities would be no more or less than that over which a utility function maps. —SlamDiego_←T 10:10, 9 August 2007 (UTC)

Fine. Now in what sense is that mapping a measure? --Rinconsoleao 10:42, 9 August 2007 (UTC)

Arithmetic performed upon it yields meaning full results. For example, as I stated elsewhere, the signs of differences are meaningful. That is why transformations must be at least monotonic (if not more rigidly restricted) to be accceptable, and why monotonic transformations are possible. I have already made these points. —SlamDiego_←T 10:47, 9 August 2007 (UTC)

OK, but if that's what you mean by measure, then it is not what is meant by measure in measure theory. Therefore, I would again suggest that we eliminate the link to measure theory, which will only confuse readers. A measure, in measure theory (as I assume you do know) is a function that maps sets to the real line, subject to certain regularity conditions. The main regularity condition is that the measure of the union of A and B is at least as large as the measure of A. One can perform meaningful arithmetic on functions which are not measures. --Rinconsoleao 11:07, 9 August 2007 (UTC)

'Utility' section

The section on 'utility' is well-written and makes some important philosophical distinctions, but I think it still needs improvement.

(1) The section mentions 'quantified' conceptions of utility, but fails to point out that there are two very different forms of quantification: 'cardinal' models of utility where the numerical value of utility is assumed to have some actual meaning in terms of intensity, and 'ordinal' models where the numerical value only indicates the position of a particular choice in a ranking of possible choices. Should mention both. Would also be helpful to mention that models of expected utility are implicitly assuming cardinality.

(2) The Austrian conception is mentioned as a non-quantified version of utility, saying that utility is conceived in terms of 'satisfaction of needs'. That's a good description, but may be unclear to someone who is not already familiar with the Austrian concept. It would be helpful to say a bit more to clarify this, mentioning rankings of possible uses of the goods consumed.

Alternatively, and probably better, we could add a section on 'Non-quantified marginal utility' to complement the section on 'Quantified marginal utility'. Rinconsoleao (talk) 14:21, 10 September 2010 (UTC)

Rinconsoleao is right. The term quantified is ambiguous. See this statement, for example: "quantifiable ... as if different levels of utility could be compared along a numerical scale". What does compared means? A meaningful comparison of the differences between two utility measures implies cardinal utility. Meaningful comparisons across numbers as in ratio scales is not even cardinal utility, is measurable utility (a concept a bit more primitive, see cardinal utility). And finally, there is ordinal utility theory, in which comparisons are not meaningful unless they use the ratios of the first derivatives of the posited utility index. --Forich (talk) 19:47, 10 September 2010 (UTC)

Thanks, this also seems helpful for addressing my comments in the previous section, on measure theory. I was unaware of the term measurable utility that is discussed on the cardinal utility page. Now I understand how the term 'measure' crept into the marginal utility page. But as far as I can tell, this is still unrelated to measure theory in the mathematical sense of the word. So do you agree that the linking to measure theory is inappropriate? Rinconsoleao (talk) 10:28, 13 September 2010 (UTC)

the measurability issue is relevant to the cardinal utility entry, but not so much for the marginal-utility one. I agree that the link is unnecessary. --Forich (talk) 14:01, 13 September 2010 (UTC)

(3) The penultimate paragraph makes the claim that an ordinal conception of utility 'doesn't depart from the concept of usefulness'. That's not an unreasonable claim, but it seems to be original research. The purpose of the statement seems to be to argue that all conceptions of marginal utility (not just the Austrian one) can be analyzed in the same terms, as long as we start from the notion of 'usefulness'. That philosophical claim might be true, but I have never heard it defended anywhere other than this Wikipedia page. Therefore I think it should be deleted, given Wikipedia's ban on original research. Otherwise a citation is needed, specifically defending that claim. Rinconsoleao (talk) 08:00, 10 September 2010 (UTC)

Criticisms?

I myself am not in any way qualified to provide any criticisms of Marginal Theory but there must be some out there with at least some credibility in academic circles. I think it would round out the article if such criticisms could be including. Thank you. WjtWeston (talk) 21:02, 3 December 2010 (UTC)

First sentence imo wrong

I didn't want to change it right away, but in an academic discussion I got confronted with the opinion that marginal utility was defined as a marginal change in utility, with reference to this Wikipedia article, which starts as:

"In economics, the marginal utility of a good or service is the gain (or loss) from an increase (or decrease) in the consumption of that good or service."

This sentence is at best misleading (I would say it's bluntly wrong). What is described here is a change (not even necessarily a marginal one) of utility. The correct definition of marginal utility is later given in the section "Quantified_marginal_utility". Translating what is expressed here in equations this into words, the first sentence should read:

"In economics, the marginal utility of a good or service is the gain (or loss) OF UTILITY RESULTING from a SMALL increase (or decrease) in the consumption of that good or service, DIVIDED BY THE MAGNITUDE OF THE RESPECTIVE INCREASE OR DECREASE." — Preceding unsigned comment added by 141.65.150.125 (talk) 19:19, 1 June 2012 (UTC)

Neutral Point of View?

The article dismisses marginal theory as a law with no citations but original research and thereby continues to refer to it as a law with a condescending tone, as if written by someone with propaganda. I'll try to make a few minor edits and add an original research tag to the section attempting to refute the argument. leaflord 20:07, 16 July 2012 (UTC) — Preceding unsigned comment added by Leaflord (talk • contribs)

Holy crap you've munged up the article pretty bad, removing links to other wiki pages and taking things out of order. 76.21.107.221 (talk)