>Professor White wrote: >> Oh come now! This argument is akin to saying that because eating one ice >> cream cone is good, eating ten thousand at a sitting is better -- or at >> least until you reach your bliss point and start craving tobacco. My simple >> (Economics 101) rebuttal is based on diminishing marginal utility. I derive >> utility from your happiness of course, but when your happiness begins to >> reach blissful proportions you become annoying to the point where my >> marginal utility is less than zero. The graphical explanation relies on a >> sigmoid or parabolic curve. and in response Darren Bush writes: >Either way, whether I accept that utility diminishes at the margin >or we achieve cosmic orgasm through utility functions that take into >account the happiness of other people, I am still left with very >little information about human behavior outside the market or the >world of finance. Actually, I wouldn't give up quite that easily. Although principles texts rely on diminishing marginal utility as a heuristic it has been total discredited as a plausible theory even by neoclassical economists. None other than Paul Samuelson, who doesn't hesitate to the theory of diminishing marginal utility in his principles text, wrote, "The discrediting of utility as a psychological concept robbed it of its only possible vriture as an explanation of human behavior in other than a circular sense, revaling its empitness as even a construction." [Collected Scientific Papers, "A Note on the Theory of Pure Consumers Behavior," p. 3.] Its been a long time since graduate school but as I recall diminsihing marginal utility relies on cardinal utility which requires that utility be independent and additive. It was this property that caused nc theory to abandon cardinal utility i.e., diminishing marginal utility, infavor of ordinal utility and a diminishing marginal rate of substitution. In fact, ordinal utility theory embraces the pig principle i.e., more is always prefered to less. In pen-l solidarity Rudy ===================================================================== + Rudy Fichtenbaum + Internet [EMAIL PROTECTED] + + Department of Economics + Internet [EMAIL PROTECTED] + + Rike Hall + Bitnet [EMAIL PROTECTED] + + Wright State University + Telephone 513-873-3085 + + Dayton, OH 45435 + FAX 513-873-3545 + +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
