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Carvalho Castro, Luiz, and Antônio Souza Araujo. "Marginal Utility & its Diminishing Methods." Number-2, February 2019 2, no. 2 (February 28, 2018): 35–47. http://dx.doi.org/10.35935/tax/22.4735.
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In this article we have shown what is marginal utility in economics and its diminishing method mathematically. Marginal utility is an economic concept and very important to the theory of economic sciences. So we selected this topic to describe it with the concept of economics and mathematics elaborately. At the beginning of this article readers will find the definition of marginal utility and at the middle of this article, readers will find it's diminishing method mathematically. The term marginal utility has a good impact in economics. In economics, utility is the satisfaction or benefit derived by consuming a product; thus the marginal utility of a good or service is the change in the utility from an increase in the consumption of that good or service.
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Filipic, Petar. "The legitimacy of increasing marginal utility in social services: The case of university examinations." Ekonomski anali 55, no. 186 (2010): 67–87. http://dx.doi.org/10.2298/eka1086067f.
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The concept of utility became rightfully recognized in economic theory with the introduction of decreasing marginal utility. However a question that arises is: does an increasing consumption of goods always and without exception lead to diminishing marginal utility? It is quite possible that in some cases marginal utility of goods and services actually increases. If this fact is true, it might additionally strengthen the utility theory and make it applicable in numerous cases of economic and social reality. This paper uses the example of the utility of studying at university (i.e. the utility of university examinations), and tries to add a few arguments in favour of the statement that the law of increasing utility exists.
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Veblen, T. "The Limitations of Marginal Utility." Voprosy Ekonomiki, no. 7 (July 20, 2007): 86–98. http://dx.doi.org/10.32609/0042-8736-2007-7-86-98.
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The article written by the founder of institutionalism and published in 1909 is translated into Russian for the first time. Veblen criticizes different versions of neoclassical theories of production and consumption, trying to consider human behavior in the wide cultural context. He suggests a methodological alternative to neoclassical theory, rebutting teleological explanations of neoclassics and emphasizing causal relations. Moreover Veblen formulates a theoretical alternative: he develops a theory of institutional evolution and describes how habits, customary modes of thought and conventional judgments influence behavior of businessmen and how the analysis of their scheme of life can contribute to deeper understanding of their economic activity.
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Mahmutefendić, Tahir. "ECONOMICS OF THEFT." ЗБОРНИК РАДОВА ЕКОНОМСКОГ ФАКУЛТЕТА У ИСТОЧНОМ САРАЈЕВУ 1, no. 9 (December 31, 2014): 9. http://dx.doi.org/10.7251/zrefis1409009m.
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‘Economics of Theft’ analyses theft asan economic and social activity. The article challengesconventional attitude to theft as repulsive activitywhich causes moral indignation. Theft is analysedthrough two criteria which economists usually usewhen judging any economic activity; efficiency andequity. In addition to these two criteria a third one isintroduced, namely the optimal level of theft. In a vastmajority of cases theft redistributes income from betteroff to worse off; therefore, theft passes the test ofequity. Also, at lower levels a thief’s utility exceeds thedamage which a victim of theft suffers. As levels oftheft increase, marginal utility to a thief falls andmarginal damage to a victim of theft increases.Optimal level of theft is achieved when marginal utilityto a thief equals marginal damage to a victim of theft.Economists do not feel any moral indignation to theftsince it passes the test of equity. What concernseconomists is the fact that theft is unproductive activitywhich does not create any new value. Theft, therefore,does not pass the test of efficiency. The articleanalyses and compares theft with several economicactivities which do not create any material, intellectualor spiritual value and which pass neither the efficiencynor the equity test. Those activities might cause moralindignation but are perfectly legal. Economists canjustify theft until optimal level is reached, i.e. when thethief’s utility is equal to the damage suffered by avictim of theft. Laws, however, punish every theft evenwhen it is socially just. Apparently, there is a frictionbetween the economic theory and the legal system.Something must be wrong either with the economictheory or with the law. Or maybe both of them arewrong. A possible explanation might be found inMontesque’s statement that the legal system is anetwork through which big fish pass and small fish arecaught.
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Zgheib, Philippe W., Nathalie K. Zgheib, Alfred A. Cecchetti, Bambang Parmanto, Sjarif Ahmad, and Robert A. Branch. "In-hospital drug-use optimization using the Marginal Utility Theory." Journal of Pharmaceutical Health Services Research 2, no. 2 (April 4, 2011): 89–95. http://dx.doi.org/10.1111/j.1759-8893.2011.00039.x.
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Chong, Zhang, Haoping Liu, Hyoung Jun Kim, Qian Wu, and Samuel Xie. "The Rationality of Addiction." Deakin Papers on International Business Economics 2, no. 2 (December 1, 2009): 1–8. http://dx.doi.org/10.21153/dpibe2009vol2no2art192.
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This paper presents a discussion on the rationality of addiction using economic theories. Drug abuse is the dominant context for addict ion in this paper. However, it does not preclude a broader definition, encapsulating dependence on substances other than pharmacological agents; let it be nicotine , alcohol, coffee, chocolates or sex. The argument follows the progression in rationale from consumption to addiction to eventual remission. The economics of any behaviour, addiction-motivated or otherwise, distils down to the scarcity of means and our intuitions of opportunity costs involved in making a choice. The two concepts are interrelated. The process of decision-making weighs the benefit of each choice (its marginal utility) against its opportunity cost. In utility maximization theory, money is a scarce resource assumed important for maximizing utility. Therefore, choice on consumption is decided by the relative price between two goods. Overall utility is maximized when the ratio of the prices of two desired goods is equal to their marginal rate of substitution – the ratio of their marginal utilities. That is, the objective or source of utility for a consumer is to maximi ze the total value of their available money.
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Alvino, Letizia, Efthymios Constantinides, and Massimo Franco. "Towards a Better Understanding of Consumer Behavior: Marginal Utility as a Parameter in Neuromarketing Research." International Journal of Marketing Studies 10, no. 1 (February 27, 2018): 90. http://dx.doi.org/10.5539/ijms.v10n1p90.
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Understanding consumers’ decision-making process is one of the most important goal in Marketing. However, the traditional tools (e,g, surveys, personal interviews and observations) used in Marketing research are often inadequate to analyse and study consumer behaviour. Since people’s decisions are influenced by several unconscious mental processes, the consumers very often do not want to, or do not know how to, explain their choices. For this reason, Neuromarketing research has grown in popularity. Neuromarketing uses both psychological and Neuroscience techniques in order to analyse the neurological and psychological mechanisms that underlying human decisions and behaviours. Hence, studying these mechanisms is useful to explain consumers’ responses to marketing stimuli.This paper (1) provides an overview of the current and previous research in Neuromarketing; (2) analyzes the use of Marginal Utility theory in Neuromarketing. In fact, there is remarkably little direct empirical evidence of the use of Marginal Utility in Neuromarketing studies. Marginal Utility is an essential economic parameter affecting satisfaction and one of the most important elements of the consumers’ decision-making process. Through the use of Marginal Utility theory, economists can measure satisfaction, which affects largely the consumer’s decision-making process. The research gap between Neuromarketing and use of Marginal Utility theory is discussed in this paper. We describe why Neuromarketing studies should take into account this parameter. We conclude with our vision of the potential research at the interaction of Marginal Utility and Neuromarketing.
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Alghalith, Moawia. "New methods of modeling and estimating preferences." Studies in Economics and Finance 36, no. 1 (May 30, 2019): 83–88. http://dx.doi.org/10.1108/sef-12-2017-0354.
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Purpose This paper aims to quantify preferences without having to have any utility data. Design/methodology/approach We use duality theory, Taylor’s theorem and nonlinear regressions. Findings We presented pioneering quantitative methods in economics and business. These methods can be applied to numerous topics in empirical and theoretical economics and business. Moreover, this paper highlighted the interdisciplinary nature of economics. In doing so, it emphasized the interface between economics, marketing, management, statistics and mathematics. Furthermore, it circumvented a major obstacle in the literature: the curse of dimensionality. Originality/value The authors introduce a novel and convenient approach to utility modeling. In doing so, they present a general utility function in a simple form. Furthermore, they develop a method to measure preferences without any utility data. They also devise a method to measure the marginal utility. Then, they develop new methods of modeling and measuring the consumer utility. In so doing, they overcome a major obstacle: the curse of the dimensionality. In addition, they introduce new methods of modeling and measuring the consumer demand for the firm’s good.
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Feng, Yu. "A Study on “Value” Concept of the Austrian School." Asian Social Science 16, no. 4 (March 31, 2020): 42. http://dx.doi.org/10.5539/ass.v16n4p42.
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The marginal utility theory of Austrian School is an important value theory in western economics. Need theory is the basis and premise of value theory. Need, which is equivalent to desire, has two specific connotations: "one of many needs" and "feelings of a certain need". The contribution and innovation of the need theory of Austrian School lies in that it puts forward two classifications of needs through studying the significance of needs, points out that value is only related to the classification of degrees of needs, reveals the general rule that the importance of one need decreases gradually with the increase in satisfaction, and puts forward the core concept of "marginal utility". The Austrian School studies the quality and quantity of value with human needs or desires as the measure of value. In the qualitative aspect of value, whether people's needs can be met is the direct basis for judging the existence of value, and whether it can improve people's life and welfare is the fundamental reason to judge the value of goods. In terms of the quantity of value, economists of the Austrian School propose the principle that marginal utility determines the value of the last unit of goods, completely solve Adam Smith's value paradox and achieve the transcendence of subjective utility theory.
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Bradley, Michael E. "Efficiency Wages and Classical Wage Theory." Journal of the History of Economic Thought 29, no. 2 (June 2007): 167–88. http://dx.doi.org/10.1080/10427710701335901.
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In The General Theory, John Maynard Keynes lumped together the marginalist and neoclassical economics of the late nineteenth and twentieth centuries and the more narrowly defined “classical” economics of Adam Smith, David Ricardo, J. R. McCulloch, James and John Stuart Mill and other mainstream economists of the late eighteenth and early nineteenth into what he called the “classical theory of employment,” which he reduced to two “fundamental postulates”:(a) The wage is equal to the marginal product of labour…(b) The utility of the wage when a given volume of labour is employed is equal to the marginal disutility ofthat amount of employment…(Keynes 1936, p. 5).
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Yadgarov, Yakov. "Replacing Cost-Based Theories of Value with Marginalist and Behavioral as a Key Factor of Improving Economic Theory and Enhancing its Credibility." Journal of Economic History and History of Economics 22, no. 1 (March 3, 2021): 78–95. http://dx.doi.org/10.17150/2308-2488.2021.22(1).78-95.
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The purpose of the research is providing the basis for the following hypothesis: the quest for enhancement of economic science and regaining its credibility in history of economic thought has led to innovations made by adherents of marginalism, institutionalism and unorthodox neoclassical economics. It marked the start of high-quality thinking on theory of value from the prospective of its marginalist and behavioral versions. The text demonstrates the orthodox character of cost-oriented approach in theory of value, used by fathers of political economy, whose conclusions on commodity value were connected either with labor costs or with total costs of production. It was revealed that the first-wave marginalist economics defined marginal utility as a key price-determining factor, and due to it value therefore can be created only in consumption. The research also found that the second-wave marginalists considered that there are two main elements, which determine price, these are: marginal utility and marginal cost. This conclusion enabled them to overcome the subjectivism and psychologism in theory of value. The supporters of behavioral approach in theory of value put an emphasis on psychologically-based behavior of an individual, as well as on legal foundations of institutional behavior. As a conclusion, the article states that marginalist and behavioral theories of value are rather feasible, as they complement each other and could be applied in modern economic conditions, enhancing the genuine credibility of the economic science.
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Moss, Laurence S. "Isaac Butt and the Early Development of the Marginal Utility Theory of Imputation." American Journal of Economics and Sociology 69, no. 1 (January 2010): 210–31. http://dx.doi.org/10.1111/j.1536-7150.2009.00676.x.
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Persky, Joseph. "Marshall's Neo-Classical Labor-Values." Journal of the History of Economic Thought 21, no. 3 (September 1999): 257–68. http://dx.doi.org/10.1017/s1053837200004259.
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With the coming of marginal utility theory, the economists of the late nineteenth century were left with a theory of exchange values, but not with a theory of value. For example, William Stanley Jevons suggested that the concept of value be dropped from economics, leaving behind only vectors of exchange ratios (Jevons 1879). Not a few general equilibrium economists today hold much the same view. However, then, as today, there were seemingly fundamental economic questions that required a more general concept of value. Whenever economists turned to describing the movements in the economy over time or comparing the economies of different countries, they inevitably wanted to make statements about changes or differences in the real value of goods.
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Peart, Sandra J. "Jevons's Applications of Utilitarian Theory to Economic Policy." Utilitas 2, no. 2 (November 1990): 281–306. http://dx.doi.org/10.1017/s0953820800000704.
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The precise nature of W. S. Jevons's utilitarianism as a guiding rule for economic policy has yet to be investigated, and that will be the first issue treated in this paper. While J. A. Schumpeter, for instance, asserted that ‘some of the most prominent exponents of marginal utility’ (including Jevons), were ‘convinced utilitarians’, he did not investigate the further implications for Jevons's policy analysis.
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Samuilovich Gasparian, Mikhail, Irina Anatolievna Kiseleva, Dmitry Gennadievich Korneev, Sergey Arkadyevich Lebedev, and Viktor Arkadyevich Lebedev. "Role of the St. Petersburg Paradox in Decision-Making." International Journal of Engineering & Technology 7, no. 4.38 (December 3, 2018): 186. http://dx.doi.org/10.14419/ijet.v7i4.38.24438.
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The article considers the appearance and modern interpretations of the St. Petersburg paradox. A review of the main solutions of the St. Petersburg paradox and an attempt to define their significance for the economic theory have been made. The impact of this problem on the economic theory can be seen by the example of such provisions as the principle of diminishing marginal utility, the use of expected utility as a criterion for decision-making in the context of uncertainty, as well as the basics of microeconomics of insurance and risk management, game theory, and some approaches to financial modeling.
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Zafirovski, M. "Max Weber's Analysis of Marginal Utility Theory and Psychology Revisited: Latent Propositions in Economic Sociology and the Sociology of Economics." History of Political Economy 33, no. 3 (September 1, 2001): 437–58. http://dx.doi.org/10.1215/00182702-33-3-437.
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Benjamin, Daniel J., Ori Heffetz, Miles S. Kimball, and Nichole Szembrot. "Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference." American Economic Review 104, no. 9 (September 1, 2014): 2698–735. http://dx.doi.org/10.1257/aer.104.9.2698.
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This paper proposes foundations and a methodology for survey-based tracking of well-being. First, we develop a theory in which utility depends on “fundamental aspects” of well-being, measurable with surveys. Second, drawing from psychologists, philosophers, and economists, we compile a comprehensive list of such aspects. Third, we demonstrate our proposed method for estimating the aspects' relative marginal utilities—a necessary input for constructing an individual-level well-being index—by asking ∼4,600 US survey respondents to state their preference between pairs of aspect bundles. We estimate high relative marginal utilities for aspects related to family, health, security, values, freedom, happiness, and life satisfaction. (JEL C43, C83, D12, I31)
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Zuo, Yuting, and Chunfang Chen. "A New Fuzzy Multiple Attribute Decision Making Method Based on the Utility Transformation Functions." Symmetry 11, no. 3 (March 21, 2019): 418. http://dx.doi.org/10.3390/sym11030418.
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The 2-tuple linguistic information model (2TLIM) is a useful tool to avoid the loss of information, which has been widely adapted in the study of the multiple attribute decision making (MADM) problem. However, there is a limitation, the limitation is that the difference between the neighboring 2-tuple linguistic information is fixed regardless of the decision-makers’ attitude. In this paper, we define the utility transformation functions based on the 2-tuple linguistic utility to overcome the drawback. Firstly, by introducing the economic utility theory, the 2-tuple linguistic utility is defined, the 2-tuple linguistic utility parameter (2TLUP) and the 2-tuple linguistic marginal utility (2TLMU) are constructed to achieve the measurement of the decision-makers’ attitude. The utility transformation functions are developed on the decision-makers’ attitude. Secondly, the 2-tuple linguistic operational laws are presented with the extended Hamacher T-norm (TN) and T-conorm (TC). Subsequently, we propose the 2-tuple linguistic utility weighted average (2TLUWA) operator and the method of MADM. Lastly, the application and the comparison with the existing methods are summarized to verify the practicality and advantages of the proposed method of MADM.
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Cummins, Robert A. "Comparison Theory in Economic Psychology Regarding the Easterlin Paradox and Decreasing Marginal Utility: a Critique." Applied Research in Quality of Life 6, no. 3 (July 16, 2011): 241–52. http://dx.doi.org/10.1007/s11482-011-9151-9.
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Ball, Stephen W. "Economic Equality: Rawls versus Utilitarianism." Economics and Philosophy 2, no. 2 (October 1986): 225–44. http://dx.doi.org/10.1017/s1478061500002644.
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Perhaps the most salient feature of Rawls's theory of justice (Rawls, 1971) which at once attracts supporters and repels critics is its apparent egalitarian conclusion as to how economic goods are to be distributed. Indeed, many of Rawls's sympathizers may find this result intuitively appealing, and regard it as Rawls's enduring contribution to the topic of economic justice, despite technical deficiencies in Rawls's contractarian, decision-theoretic argument for it (see, e.g., Nagel, 1973, p. 234) which occupy the bulk of the critical literature. Rawls himself, having proposed a “coherence” theory of justification in metaethics, must regard the claim that his distributive criterion “is a strongly egalitarian conception” (Rawls, 1971, p. 76) as independently a part of the overarching moral argument. The alleged egalitarian impact of Rawls's theory is crucial again in normative ethics where Rawls is thought to have developed a major counter-theory to utilitarianism (cf. Braybrooke, 1975, p. 304), one of the most popular criticisms of which has been its alleged inadequacy in handling questions of distributive justice. Utilitarians can argue, however, as Brandt recently has, that the diminishing marginal utility of money, along with ignorance of income-welfare curves, would require a utility-maximizing distribution to be substantially egalitarian (Brandt, 1979, pp. 311f., 315f.; cf. Brandt, 1983, p. 102f.). The challenge is therefore for Rawls to show that his theory yields an ethically preferable degree of equality.
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Shirokorad, L. D. "Nikolay Sieber in the history of prerevolutionary Russian economic thought." Voprosy Ekonomiki, no. 4 (April 28, 2018): 95–110. http://dx.doi.org/10.32609/0042-8736-2018-4-95-110.
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This article shows how representatives of various theoretical currents in economics at different times in history interpreted the efforts of Nikolay Sieber in defending and developing Marxian economic theory and assessed his legacy and role in forming the Marxist school in Russian political economy. The article defines three stages in this process: publication of Sieber’s work dedicated to the analysis of the first volume of Marx’s Das Kapital and criticism of it by Russian opponents of Marxian economic theory; assessment of Sieber’s work by the narodniks, “Legal Marxists”, Georgiy Plekhanov, and Vladimir Lenin; the decline in interest in Sieber in light of the growing tendency towards an “organic synthesis” of the theory of marginal utility and the Marxist social viewpoint.
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G. Eisenhauer, Joseph. "Labor supply with Friedman-Savage preferences." Studies in Economics and Finance 31, no. 2 (May 27, 2014): 186–201. http://dx.doi.org/10.1108/sef-08-2012-0095.
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Purpose – Some labor supply curves exhibit inflection points at which they bend backward or fall forward; thus, some workers alternate between increasing and decreasing their labor hours as wages increase. No consensus has yet been reached on the underlying motive for such behavioral inconsistencies. This paper aims to develop a unified theory to explain each of these variations in labor supply. Design/methodology/approach – The author employs a simple model of labor supply with additively separable utility over income and leisure. The sub-utility function for income is of the Friedman-Savage type, exhibiting preferences that alternate between increasing and diminishing marginal utility of income. Findings – Labor supply curves slope downward where relative risk aversion is strong, and upward where relative risk aversion is weak or negative. Thus, utility functions with inflection points can form the basis of labor supply curves with inflection points. Research limitations/implications – Friedman-Savage utility can explain virtually any observed labor supply functions, including convex, backward-bending, forward-falling, and inverted-S curves. Practical implications – Inflection points on the labor supply curve can create multiple and unstable market equilibria. Labor-market policies, including legislation pertaining to minimum wages and collective bargaining, and policies to enhance education and economic security, may reduce aversion to risk and thereby decrease the prevalence of unstable equilibria. Originality/value – This paper unites two lines of research – labor supply and Friedman-Savage utility – which have, rather remarkably, been separate to date. In doing so, it provides a new application of the classic Friedman-Savage paradigm, and a new explanation of labor supply curves with negatively-sloped regions.
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Pink, Małgorzata. "Value Theory in the Economics of Sustainable Development." Problemy Ekorozwoju 15, no. 1 (January 1, 2020): 95–102. http://dx.doi.org/10.35784/pe.2020.1.11.
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Historically, the value theory was based on an objectivist approach, where the value of the goods arises through the involvement of private means of production, with a special role of work or a subjectivist approach, where value is a subjective phenomenon and depends on marginal utility of the economic entity. The neoclassical revolution replaced the vague value theory with price theory, the economic reality and consumer expectations led to a situation in which lowering the price of goods at the expense of the environment became a commonly accepted mode of operation. For a long time, the value theory in economics was not an area of reflection, both in the sense of economic and moral value. It was assumed that the subjective character of the value phenomenon makes the analysis of value elusive for the tools of economics. At the same time, environmental goods were considered to be so-called free, occurring in unlimited quantities. These assumptions have contributed to the development of an economics theory that is the antithesis of the economics of sustainable development, excessively exploiting the environment and, indirectly, society as well. The assumptions of sustainable development redefine the space for interpretation of the value theory and imply a change in the approach to an environmental element that cannot be understood in the sense of a free good and which imposes an objective understanding of values that can be preserved or lost in the production process.
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Boucekkine, Raouf, Carmen Camacho, and Benteng Zou. "BRIDGING THE GAP BETWEEN GROWTH THEORY AND THE NEW ECONOMIC GEOGRAPHY: THE SPATIAL RAMSEY MODEL." Macroeconomic Dynamics 13, no. 1 (February 2009): 20–45. http://dx.doi.org/10.1017/s1365100508070442.
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We study a Ramsey problem in infinite and continuous time and space. The problem is discounted both temporally and spatially. Capital flows to locations with higher marginal return. We show that the problem amounts to optimal control of parabolic partial differential equations (PDEs). We rely on the existing related mathematical literature to derive the Pontryagin conditions. Using explicit representations of the solutions to the PDEs, we first show that the resulting dynamic system gives rise to an ill-posed problem in the sense of Hadamard. We then turn to the spatial Ramsey problem with linear utility. The obtained properties are significantly different from those of the nonspatial linear Ramsey model due to the spatial dynamics induced by capital mobility.
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Gunning, J. Patrick. "H. J. Davenport's Loan Fund Theory of Capital." Journal of the History of Economic Thought 20, no. 3 (September 1998): 349–69. http://dx.doi.org/10.1017/s1053837200002170.
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The loan fund theory of capital was developed by the unheralded American economist, Herbert J. Davenport (1861-1931). Davenport's name has virtually disappeared from writings on the history of economic thought. Today, he seems best known as a teacher of Frank Knight at Cornell around 1915. Davenport wrote three major books during an 18-year period between 1896 and 1914. The first (1896) was a treatise based on what he called the “principle of sacrifice,” or subjective opportunity cost. His second book, Value and Distribution (1908), covered much of the same ground but also presented some original contributions. It marked his emergence as a professional economist, since he presented his ideas within the context of an appraisal of classical and neoclassical economic doctrine. Among other things, the book contained a penetrating, subjectivist critique of four ideas in the history of subjectivist economics: marginal utility, Eugen von Bohm-Bawerk's theory of capital, Friedrich Wieser's theory of cost, and Frank Fetter's theory of market interest. It also introduced the loan fund theory of capital, which is the topic of this paper.
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Lührmann, Melanie. "Consumer Expenditures and Home Production at Retirement – New Evidence from Germany." German Economic Review 11, no. 2 (May 1, 2010): 225–45. http://dx.doi.org/10.1111/j.1468-0475.2010.00509.x.
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Abstract This paper investigates consumer expenditures of German households pre- and post-retirement. The widely observed distinct drop in spending upon retirement entry poses an empirical puzzle since life cycle theory predicts smoothing of the marginal utility of consumption over time. As one explanation, I explore the role of home production as a substitute for consumer expenses. Taking a combined look at consumer expenditures and time use pre- and post-retirement, I find a significant drop of about 17% of pre-retirement expenses at retirement which coincides with an increase in time spent on home production of an additional 89 minutes per day, accounting for 21% of average home production.
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PAPADOPOULOS, KOSMAS, and BRADLEY W. BATEMAN. "KARL KNIES AND THE PREHISTORY OF NEOCLASSICAL ECONOMICS: UNDERSTANDING THE IMPORTANCE OF “DIE NATIONALOEKONOMISCHE LEHRE VOM WERTH” (1855)." Journal of the History of Economic Thought 33, no. 1 (March 2011): 19–35. http://dx.doi.org/10.1017/s1053837210000611.
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This essay serves as the introduction to the authors’ translation of Karl Knies’ essay “Die nationaloekonomische Lehre vom Werth” (1855). Knies is one of the acknowledged founders of the Older German Historical School, and yet in recent years several writers have described his 1855 essay as seminal in the evolution of marginal utility analysis. The authors examine how Knies develops his nascent theory of marginal reasoning in his essay, arguing that rather than cling to his earlier historicist programmatic, Knies attempts to discover general laws; however, not by strict causal analysis but by a typical ‘German art’ of taxonomy and classification that resembles juridical argumentations. This results in an ambiguous text, which influenced several marginalist pioneers who studied under Knies at Heidelberg (including Eugen von Böhm-Bawerk, Friedrich von Wieser, and John Bates Clark), as well as several members of the Younger German Historical School (including Gustav von Schmoller).
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Olbrich, Michael, Tobias Quill, and David J. Rapp. "Business Valuation Inspired by the Austrian School." Journal of Business Valuation and Economic Loss Analysis 10, no. 1 (January 1, 2015): 1–43. http://dx.doi.org/10.1515/jbvela-2014-0001.
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AbstractThe significant failure rates observed in mergers and acquisitions (M&A) indicate structural deficiencies in business transactions. This paper identifies serious weaknesses in common valuation methods that play a key role in poor transaction practice. Common valuation methods are in particular discounted cash flow (DCF) methods. DCF methods are usually based on neo-classical theories that assume the existence of a perfect and complete capital market. As will be demonstrated, the underlying theoretical patchwork is contradictory and lacks utility. Therefore, utilizing DCF methods to value a business and deduce economic decisions from such a valuation is decision-making built on sand. Following a normative-deductive methodology, this paper seeks an alternative theoretical concept to build a business valuation theory on solid ground. Such an alternative is found in the Austrian School of thought. The resulting valuation concept, subjective business valuation theory, is based on the theory of marginal utility proposed by Gossen, which was rediscovered and refined by the scholars of the early Austrian School. Contrary to highly restrictive neo-classical valuation, subjective business valuation approaches reality and is therefore well-suited for practical implementation.
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Jakobsen, Katrine, Kristian Jakobsen, Henrik Kleven, and Gabriel Zucman. "Wealth Taxation and Wealth Accumulation: Theory and Evidence From Denmark*." Quarterly Journal of Economics 135, no. 1 (October 9, 2019): 329–88. http://dx.doi.org/10.1093/qje/qjz032.
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Abstract Using administrative wealth records from Denmark, we study the effects of wealth taxes on wealth accumulation. Denmark used to impose one of the world’s highest marginal tax rates on wealth, but this tax was greatly reduced starting in 1989 and later abolished. Due to the specific design of the wealth tax, the 1989 reform provides a compelling quasi-experiment for understanding behavioral responses among the wealthiest segments of the population. We find clear reduced-form effects of wealth taxes in the short and medium run, with larger effects on the very wealthy than on the moderately wealthy. We develop a simple life cycle model with utility of residual wealth (bequests) allowing us to interpret the evidence in terms of structural primitives. We calibrate the model to the quasi-experimental moments and simulate the model forward to estimate the long-run effect of wealth taxes on wealth accumulation. Our simulations show that the long-run elasticity of taxable wealth with respect to the net-of-tax return is sizable at the top of the distribution.
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Gorbunov, V. K., L. A. Kozlova, and A. G. Lvov. "To the Problem of Constructing Analytical Indexes of Market Demand: A Variative Approach." Voprosy statistiki 27, no. 3 (June 30, 2020): 65–80. http://dx.doi.org/10.34023/2313-6383-2020-27-3-65-80.
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The article develops methods for constructing economic (analytical) indexes in the framework of the holistic theory of market demand, built in recent years. By this, the economic indexes presented in the world literature within the framework of the theory of individual demand and, accordingly, related to households, acquire practical value.The introduction provides a brief overview of the main problems of modern indexology and the implementation of an economic approach dating back to the classical work of 1924 by the Soviet statistician A.A. Konüs. The properties of the most well-known «formula» indexes of Laspeyres, Paasche, and Fischer with respect to the fulfillment of the Fisher test criteria are described. These indexes play an important role in the methods proposed by the authors for constructing analytical indexes, which are determined through the function of consumer expenditures. The latter is determined by a utility function that rationalizes trade statistics. The rationalizing utility function is constructed ambiguously, and the corresponding task should be specified. Methods for its solution are proposed, developed within a non-parametric demand analysis of Afriat-Varian. The core of this analysis is the system of linear Afriat’s inequalities that determine the values of the utility function and marginal utility corresponding to statistical demand. This system can be inconsistent and unstable with respect to variations of non-exact demand statistics. In the case of compatibility, inequalities have many solutions, and the choice of different solutions of inequalities gives different values of analytical indexes. The authors suggest three types of tasks for the stable solution of Afriat’s inequalities, which define indexes with characteristics of optimism (low price indexes and high quantity indexes), pessimism (vice versa) and objectivity.Therefore, the problem of increasing the objectivity of consumer demand indexes receives a theoretically justified toolbox methods for calculating analytical market demand indexes that take into account, in contrast to formula indices, consumer preferences.
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Feshchenko, Valentyna. "Ukrainian economic thought of the last third of the 19th – early 20th centuries in the context of the development of the european liberal tradition." Ìstorìâ narodnogo gospodarstva ta ekonomìčnoï dumki Ukraïni 2019, no. 52 (2019): 7–30. http://dx.doi.org/10.15407/ingedu2019.52.007.
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The article analyzes the features of the development of marginalism and the emergence of a modern methodology for the analysis of economic processes in Ukrainian economic thought, starting with the development of the Kyiv scientific school headed by M. Bunge and ending with the works of prominent Ukrainian scientists E. Slutsky and M. Tugan-Baranovsky. These problems, considering their relevance for the present, are the subjects of modern scholars’ researches, such as T. Hayday, I. Golovata, V. Kudlak, O. Kurbet, V. Nebrat, N. Suprun, Y. Ushchapovsky, V. Feshchenko and others. The purpose of the article is to highlight the scientific contribution of Ukrainian economists of the last third of the 19th – beginning of the 20th centuries to the development of marginalism and Western European liberalism, to reveal the emergence of a new methodology of economic analysis based on the combination of ideas of classical political economy and marginal analysis, the historical school’ principles with the European socio-reformism, and the use of functional analysis with economic and mathematical research tools. Significant progress of the Ukrainian economic science in this period are the theoretical achievements of representatives of the Kyiv School of Political Economy. In the works of M. Bunge, D. Pikhno, R. Orzhentsky, and O. Bilimovych, the attention was focused on the development of the theory of value with the use of marginal analysis, the psychological foundations of the theory of value were supported, and the emphasis was placed on the social orientation of research. E. Slutsky's works «The Theory of Marginal Utility», and «On the Theory of Consumer Budget» reflected new approaches to understanding utility as an economic category, determined the value of market goods in terms of their usefulness and rarity, and initiated the study of market behavior and mechanisms of formation and stability of the consumer budget. In the context of the formation of the new methodology for economic analysis, the author reveals the priority and significance of the creation of the synthetic theory of value by M. Tugan-Baranovsky. The article highlights the significant influence of Ukrainian scientists of the studied period on the development of world economic science and substantiates the necessity of further study of their scientific work.
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Malovic, Marko. "A note about price competitiveness impact on conventional theory and overall pay-off of intraindustry trade." Ekonomski anali 51, no. 169 (2006): 166–83. http://dx.doi.org/10.2298/eka0669166m.
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Contrary to much of the mainstream literature on trade in monopolistic competition setting, we point out the importance of departure from CES dogma and consequently revealed, if thus far neglected, price competitiveness effect, as a supplement to the classical Dixit-Stiglitz "love of variety". Quite apart from initial price and cost cuts due to greater competition as well as increased consumer welfare as a corollary of more substitutes being available for consumption, there is additional room for price-cost competitiveness boost in terms of scale economies grasped by global market expansion of successful varieties (firms). Analytical framework developed in the paper has led us to conclude that intra industry trade does lower prices and enable greater variety, in as much as it raises efficiency by melting the gap between the zero-profit equilibrium utility and the constrained optimum utility. However, unlike some most recent contributions, our supposition of further downward flexibility of marginal costs prevents us from unambiguously claiming that national firms in the open economy must be fewer as opposed to the autarky case. Put differently, profit margins need not necessarily be falling pro rata (or at all, for that matter) with world prices. That might be one plausible explanation for just why in spite of evident procompetitive effects within the Ell-automobile industry, its price-cost wedges did notfall, but have rather related still. <br><br><font color="red"><b> This article has been retracted. Link to the retraction <u><a href="http://dx.doi.org/10.2298/EKA0670190U">10.2298/EKA0670190U</a></u></b></font>
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Gryshova, Inna, Tatyana Shabatura, Stasys Girdzijauskas, Dalia Streimikiene, Remigijus Ciegis, and Ingrida Griesiene. "The Paradox of Value and Economic Bubbles: New Insights for Sustainable Economic Development." Sustainability 11, no. 24 (December 4, 2019): 6888. http://dx.doi.org/10.3390/su11246888.
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The article presents a new approach to the solution to the paradox of value based on the theory of marginal utility of the Austrian School of Economics. The new approach is based on the theory of compound interests and economic bubbles. The study presents valuable theoretical insight towards sustainable economic development. The paper provides a brief formulation of the theory of compound interests, introduces the structure of compound interests model, and shows the relations between simple and compound interests as well as dimensionless interests. It reveals the saturation phenomena, and emphasizes its impact on economic and financial bubbles. The relation between the value of paradox and the price bubbles is presented. The article also explains the possibilities of the phenomenology of growth in formulating the paradox of saturation and studying the paradox of value. The phenomenological method allows to relate prices and financial and economic bubbles into a general entirety. Therefore, this paper deals with very important sustainable development issues as it discusses the market saturation phenomena, economic bubbles, and emotional consumer behavior. The limitations of behavioral theories are pointed out and their misunderstandings of information cascades are emphasized. The article provides the explanation of the nature of economic bubbles by employing the theory of compound interests.
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Hoderlein, Stefan, and Arthur Lewbel. "REGRESSOR DIMENSION REDUCTION WITH ECONOMIC CONSTRAINTS: THE EXAMPLE OF DEMAND SYSTEMS WITH MANY GOODS." Econometric Theory 28, no. 5 (August 16, 2012): 1087–120. http://dx.doi.org/10.1017/s0266466612000412.
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Microeconomic theory often yields models with multiple nonlinear equations, nonseparable unobservables, nonlinear cross equation restrictions, and many potentially multicolinear covariates. We show how statistical dimension reduction techniques can be applied in models with these features. In particular, we consider estimation of derivatives of average structural functions in large consumer demand systems, which depend nonlinearly on the prices of many goods. Utility maximization imposes nonlinear cross equation constraints including Slutsky symmetry, and preference heterogeneity yields demand functions that are nonseparable in unobservables. The standard method of achieving dimension reduction in demand systems is to impose strong, empirically questionable economic restrictions such as separability. In contrast, the validity of statistical methods of dimension-reduction such as principal components has not hitherto been studied in contexts like these. We derive the restrictions implied by utility maximization on dimension-reduced demand systems and characterize the implications for identification and estimation of structural marginal effects. We illustrate the results by reporting estimates of the effects of gasoline prices on the demands for many goods, without imposing any economic separability assumptions.
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SIMON, FABRIZIO. "AN ECONOMIC APPROACH TO THE STUDY OF LAW IN THE EIGHTEENTH CENTURY: GAETANO FILANGIERI AND LA SCIENZA DELLA LEGISLAZIONE." Journal of the History of Economic Thought 33, no. 2 (May 31, 2011): 223–48. http://dx.doi.org/10.1017/s1053837211000046.
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This work presents the elements of economic analysis of law that occur in the thought of Gaetano Filangieri. In the pages of La Scienza della Legislazione the Neapolitan writer develops a utilitarian and economic investigation that pays attention to the judgments individuals make over social phenomena at the margin point. A proof of this development can be found in the explanation of the principle of decreasing marginal utility, argued in Head XXXI of Book III, which represents one of the most effective demonstrations that can be found before the end of nineteenth-century literature. The most remarkable fact is that, of all the five parts that compose the Filangierian work, the most rich in economic arguments is dedicated to “Criminal Laws.”This article will point out this and other innovative results of the Filangerian analysis, and will also offer a reconstruction of the economic theory on crime and punishment presented in La Scienza della Legislazione. Filangieri’s criminal doctrine represents a significant example of the Enlightenment antecedents of “law and economics,” as well as the better known contributions made by Beccaria and Bentham.
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McKelvey, Seth. "“But one kind” of Life." Nineteenth-Century Literature 70, no. 4 (March 1, 2016): 448–72. http://dx.doi.org/10.1525/ncl.2016.70.4.448.
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Seth McKelvey, “‘But one kind’ of Life: Thoreau’s Subjective Theory of Value in Walden” (pp. 448–472) Literary scholars generally take for granted Henry David Thoreau’s hostility to market exchange in Walden (1854). I argue, however, that Thoreau anticipates the subjective theory of value and the related concept of diminishing marginal utility, offering glimpses of ideas that would not be formalized in economics until after his death but that should nevertheless align him with a long lineage of free market thinkers. Thoreau does not reject the marketplace as a means to achieve his own best interests, but rather challenges his society’s definition of what those interests should be, attacking the misguided desire to accumulate excessive material wealth and the burdensome labor that attends such aspirations. I juxtapose the economics put forth in Walden with the work of Austrian free market economist Carl Menger in order to illustrate how Thoreau can so vehemently oppose the materialistic obsessions of capitalism while simultaneously remaining amenable to the principles of free exchange.
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Waligorski, Conrad P. "The Loss of Happiness in Market Democracies. By Robert E. Lane. New Haven, CT: Yale University Press, 2000. 466p. $42.00 cloth, $19.00 paper." American Political Science Review 96, no. 1 (March 2002): 185–86. http://dx.doi.org/10.1017/s0003055402344319.
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Happiness, unhappiness, and depression are not the usual foci of political science or economics, but Robert Lane demonstrates their importance. The Loss of Happiness in Market Democracies is a worthy companion to and extension of Lane's earlier work, especially The Market Experience (1991). Lane employs psychology, genetics, evolutionary theory, and medical research to convince economists and democratic theorists that biological and psychological research can enrich their often unrealistic assumptions about well-being and behavior. He argues that in affluent societies there is growing unhappiness, growing depression, and declining marginal utility of income to produce happiness. These are accompanied by mistrust and increasing political negativity, which further undermine happiness. The dominant Western image of individualism ignores that people often do not know what makes them happy, which undermines prevailing market and democratic premises (p. 284).
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Hirschauer, Norbert, Antje Jantsch, and Oliver Musshoff. "Developing business ethics theory and integrating economic analysis into business ethics teaching – a conceptualization based on externalities and diminishing marginal utility." Review of Social Economy 76, no. 1 (June 7, 2017): 43–72. http://dx.doi.org/10.1080/00346764.2017.1333132.
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Hatlebakk, Magnus. "Myopic preferences or subsistence income among rickshaw cyclists." International Journal of Development Issues 14, no. 3 (September 7, 2015): 204–14. http://dx.doi.org/10.1108/ijdi-02-2015-0010.
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Purpose – The purpose of this paper is to investigate why poor people make decisions that at first sight appear irrational. The author stays within the realms of classical consumption theory, and investigates preference-based explanations. The author studies the case of rickshaw rental versus purchase. One-year rent is sufficient to buy a rickshaw in the plains of Nepal, while a rickshaw will last many years, so purchase appears very profitable. Still most cyclists rent the rickshaw. Design/methodology/approach – Based on choices made by rickshaw cyclists between hypothetical financing schemes for rickshaws we investigate whether the explanation is a high time-preference rate or a high elasticity of the marginal utility of consumption, which in turn can be explained by preferences that are formed by consumption near a subsistence level. Findings – The authors find that subsistence constraints are more important than high time-preference rates. In short, many rickshaw cyclists switch from profitable investment decisions to myopic choices if the weekly payments are too high. Research limitations/implications – In contrast to standard bidding-forms, the methodology does not allow for exact estimates of the implied time-preference rate or the elasticity of the marginal utility of consumption. Practical implications – Microcredit has no role if people are subsistence constraint, as they will need to save every day also to repay loans. Social implications – The findings indicate that myopic choices by poor people are not due to myopic preferences, but rather that the disutility of reducing consumption today is too high. Originality/value – The authors believe bidding-forms are too complex for field experiments among people with no, or minimal, education. The simple hypothetical choices we have constructed appear to work.
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Reinecke, Juliane. "Beyond a subjective theory of value and towards a ‘fair price’: an organizational perspective on Fairtrade minimum price setting." Organization 17, no. 5 (September 2010): 563–81. http://dx.doi.org/10.1177/1350508410372622.
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This article explores Fairtrade minimum price setting as an organizational formulation of a critical response to economic liberalism and its underlying notion of value—a subjective theory of value. The aim of the article is to show what happens if such meta-level philosophical debates on fairness and markets are lived out organizationally. This is achieved by using an ethnographic study of the price setting process of the Fairtrade Labelling Organizations. The case unpacks the complexities of defining a ‘fair’ price beyond the principle of marginal utility. I draw on French pragmatist sociology in order to decompose the political and moral constructions that underpin the organizational practices of minimum price setting. Challenging the assumption of free choice in neo-classical economics, Fairtrade redefines not only how value should be calculated, but also what it is it that should be valued and who values. This makes visible the political confrontation at the point of price determination, notably by providing a social arena for where conflicts of interest between opposing parties are played out. Once the producer enters price formation processes as a person and not only as the alienable owner of a commodity, the social, political and ecological and relations of production come to the fore that are otherwise concealed through the spontaneous market mechanism.
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Cook, Eli. "THE NEOCLASSICAL CLUB: IRVING FISHER AND THE PROGRESSIVE ORIGINS OF NEOLIBERALISM." Journal of the Gilded Age and Progressive Era 15, no. 3 (July 2016): 246–62. http://dx.doi.org/10.1017/s1537781416000104.
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AbstractIn examining the mathematical models, theories of value, and price statistics wielded by leading economist and social reformer Irving Fisher, this article explores the overlooked impact that Neoclassical Economics had on Progressive Era reform and thought. By offering a neoclassical theory of marginal utility that claimed that market prices reflected subjective value, Fisher formalized, legitimized, and popularized the use of price statistics in progressive political discourse, teaching the American people that if they wanted to argue over the nature of progress or the worthiness of a certain reform, they would have to price it first. The article argues that such a “pricing of progressivism” served as an important foundational precursor to the rise of neoliberal thought in the 1980s. In light of such a significant intellectual legacy, it seems imperative that intellectual historians of the Progressive Era turn their attention away from the usual suspects of this period, such as Pragmatists William James and John Dewey, and shift their analytical focus away from the “Metaphysical Club” and toward a neoclassical one.
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Fanti, Luciano, Luca Gori, and Mauro Sodini. "Nonlinear Dynamics in a Cournot Duopoly with Different Attitudes towards Strategic Uncertainty." Abstract and Applied Analysis 2013 (2013): 1–11. http://dx.doi.org/10.1155/2013/323290.
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This paper analyses the dynamics of a duopoly with quantity-setting firms and different attitudes towards strategic uncertainty. By following the recent literature on decision making under uncertainty, where the Choquet expected utility theory is adopted to allow firms to plan their strategies, we investigate the effects of the interaction between pessimistic and optimistic firms on economic dynamics described by a two-dimensional map. In particular, the study of the local and global behaviour of the map is performed under three assumptions: (1) both firms have complete information on the market demand and adjust production over time depending on past behaviours (static expectations—“best reply” dynamics); (2) both firms have incomplete information and production is adjusted over time by following a mechanism based on marginal profits; and (3) one firm has incomplete information on the market demand and production decisions are based on the behaviour of marginal profits, and the rival has complete information on the market demand and static expectations. In cases 2 and 3 it is shown that complex dynamics and coexistence of attractors may arise. The analysis is carried forward through numerical simulations and the critical lines technique.
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Kapeliushnikov, R. I. "Marginalism and Marxism: The first encounter." Voprosy Ekonomiki, no. 2 (February 7, 2021): 102–32. http://dx.doi.org/10.32609/0042-8736-2021-2-102-132.
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The paper discusses a critical episode in the history of economic thought of the 19th century — the first encounter between marginalism and Marxism. It happened in 1884, when Philip Wickstead published a short twenty-page text in the magazine of “scientific” socialism “To-Day” under the laconic title “Das Kapital: a Сriticism”. The paper briefly traces the creative path of Wickstead; considers the reasons that prompted him to make a stand against Marxism; analyzes his main criticisms; describes the reaction to them by his contemporaries (both professional economists and adherents of socialism) and evaluates the place of his work in the history of ideas. It is noted that Wicksteed’s article was not only the first encounter of marginalism with Marxism, but also the first popular exposituion of the theory of marginal utility (in the version of S. Jevons), which was completely new for that time. His criticism was radical in nature, since it was aimed not at revealing partial shortcomings, but at the complete collapse of the Marxist construction and its replacement with an alternative theoretical scheme. Amazingly, none of Marx’s supporters dared to accept Wickstead’s challenge and his criticism was never publicly contested by them. This seemingly inconspicuous event turned out to be of crucial historical significance. Under the influence of Wickstead, the Fabians rejected the labor theory of value and British socialism (in its main part) ceased to be Marxist forever.
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Brauers, Willem K. "MULTIOBJECTIVE OPTIMIZATION (MOO) IN PRIVATIZATION." Journal of Business Economics and Management 5, no. 2 (June 30, 2004): 59–65. http://dx.doi.org/10.3846/16111699.2004.9636069.
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Deregulation of public enterprises and services by privatization is very fashionable nowadays. The aim of privatization is mainly to increase effectiveness, while the government itself likes to maximize its revenue at the occasion of the takeover. Most of these public enterprises show a shortage in investment while maintenance of a reasonable employment level in the new private firm is also strongly desirable, not to mention the ecological obligations imposed on the new private firm. It means that takeover bids have to face multiple objectives and different stakeholders, i.e., all the parties interested in the issue. Traditionally the optimization of all these objectives is then judged upon in a rather subjective way. Consequently, there is a need for a more general and objective, not to say scientific, method which can compare several takeover bids for privatization optimizing multiple objectives sometimes with different units of measurement. With that purpose, a method is developed, which takes into consideration upper limits, lower bounds, dominating and nondominating effects, ending up with a set of nondominated takeover bids, which are ranked by using ratio analysis and Reference Point Theory, whereas objectivity and decreasing marginal utility are fully respected [1]. A simulation on several takeover bids for a public enterprise given multiple objectives follows the theoretical explanation.
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Wieland, Thomas. "Spatial Shopping Behavior in a Multi-Channel Environment: A Discrete Choice Model Approach." REGION 8, no. 2 (August 4, 2021): 1–27. http://dx.doi.org/10.18335/region.v8i2.361.
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Spatial impacts of online shopping are discussed frequently in retail geography. Here, online shopping is mostly regarded as a central driver of competition for physical retailing and its locations, such as town centers or malls. Due to its high popularity, cross-channel shopping is sometimes considered to be a support for physical retailing. However, traditional retail location theory does not consider shopping channels other than in-store shopping. Furthermore, although online shopping is far too important to be neglected in examining consumer spatial shopping behavior, there is an obvious lack in the previous literature towards incorporating multi- and cross-channel shopping into store choice models. The present study aims to identify the main drivers of store choice on the basis that both in-store and online shopping alternatives are available, as well as the opportunity for cross-channel shopping. Taking into account previous literature on both physical store choice and multi-channel shopping, hypotheses on the impact of different shopping transaction costs (such as travel time, delivery charges, or uncertainty with respect to the stores' assortment) were derived. Based on a representative consumer survey, real past shopping decisions in three retail sectors (groceries, consumer electronics [CE], and furniture) were collected. The econometric analysis of empirical store choices was performed using a nested logit model which includes both physical and online stores. The results confirm several assumptions of classical retail location theory as well as previous findings from single-firm studies and stated choice experiments on multi-channel shopping behavior. Travel time to physical stores reduces consumer utility and store choice probability, respectively. Consumer sensitivity towards travel time decreases with decreasing purchase frequency of the desired goods. Delivery charges also decrease the likelihood of choosing a store. The impact of cross-channel integration on store choice (assuming the reduction of consumer transaction costs) is considerably lower than expected and differs between retail sectors. While furniture retailers profit from enabling cross-channel shopping, there is no such competitive advantage found for grocery and CE retailers. The positive effect of assortment on condition of diminishing marginal utility is confirmed for grocery stores and CE stores, but not for furniture stores. From a theoretical perspective, this study shows that multi- and cross-channel shopping behavior does not contradict the main thoughts of classical retail location theory. From a practical perspective, the study is a contribution as store choice models play a significant role in both business location planning and governmental land use planning.
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Wang, Cheng, Jianxin Xu, Zhenming Zhang, and Hongjun Wang. "Reliability Guarantee Strategy for Complex System Based on Cost-Benefit Importance." Xibei Gongye Daxue Xuebao/Journal of Northwestern Polytechnical University 38, no. 6 (December 2020): 1316–21. http://dx.doi.org/10.1051/jnwpu/20203861316.
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In order to ensure the long-term stable and economic operation of complex system, the system operation process is described and the problems is solved, and a system reliability model and an optimization model for component replacement are constructed. Based on the theory of marginal utility and importance measures, a reliability guarantee strategy for complex system based on cost-benefit importance is presented, which aims to find a component preventive replacement sequence with minimum maintenance cost on the constraints of system reliability lower threshold and running time. When the system reliability drops to a preset threshold, the cost-benefit importance of each component is calculated, the component with the greatest cost-benefit importance to replace is selected, and then iterate until the operation task is completed to form an optimal component replacement sequence. The feasibility of the present strategy is verified by taking a complex system which can be equivalent to a series-parallel system as an example. The present strategy has certain reference significance of ensuring the reliable operation of some high-end equipment safety-critical systems.
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Drennan, Matthew. "Economics: Diminishing Marginal Utility." Challenge 49, no. 5 (October 2006): 71–91. http://dx.doi.org/10.2753/0577-5132490505.
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Spector, Horacio. "DECISIONAL NONCONSEQUENTIALISM AND THE RISK SENSITIVITY OF OBLIGATION." Social Philosophy and Policy 32, no. 2 (2016): 91–128. http://dx.doi.org/10.1017/s0265052516000121.
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Abstract:A good deal of contemporary moral nonconsequentialism assumes that agents have perfect knowledge about the various features and consequences of their options. This assumption is unrealistic. More often than not, moral agents can only assess with a certain degree of probability the factual circumstances that are morally relevant for their decision making. My aim in this essay is to discuss the problem of moral decisions under risk from the point of view of nonconsequentialism. Basically, I analyze how objective moral principles can be transformed into subjective, decisional prescriptions, and argue that the standard nonconsequentialist approach to moral decision making, which focuses on probability thresholds, is wrong. In accordance with the fundamental postulates of nonconsequentialism, I seek to solve the problem of risk in moral choice by proposing a theory about the marginal moral value of various options. Actions can vary along various dimensions, and each of these dimensions can offer a different moral value function. Nonconsequentialist marginalism can level the playing field with consequentialism. Whereas consequentialism can simply borrow the notion of expected utility from economics, nonconsequentialism must introduce the notion of expectational obligation to formulate a general principle of moral choice under risk. I finally suggest that further empirical work is needed to delineate the shape of various moral value functions that are critical for applying the general principle of moral decision making under risk to well-known cases.
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Dittmer, Timothy. "Diminishing Marginal Utility in Economics Textbooks." Journal of Economic Education 36, no. 4 (October 2005): 391–99. http://dx.doi.org/10.3200/jece.36.4.391-399.
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Liu, Arron R. "Post-Truth Politics: The Effect of Reminders of Political Affiliation on Partisan Op-Ed Viewership." Journal of Politics and Law 12, no. 1 (February 28, 2019): 122. http://dx.doi.org/10.5539/jpl.v12n1p122.
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Conventional economic theory depicts human-decision making as logical and rational. However, recent research has demonstrated that humans act as an irrational agent more often than not, and will habitually prioritize attitudes, emotions, values, and beliefs over a marginal analysis in their decision-making calculus. As such, individuals will regularly undertake actions in order to avoid conflicts with their beliefs. In particular, information contradicting an individual’s beliefs may be avoided to preserve an individual’s identity (information avoidance). This paper investigates the phenomena of belief-based utility and information avoidance in the political realm, an area in which the literature regarding the aforementioned theories are relatively sparse. Specifically, we explored whether a reminder of political affiliation could influence subjects to avoid reading op-eds possessing headlines indicative of a position commonly held by an opposing political party. The hypothesis was tested through a survey distributed on Amazon Mechanical Turk, where half the participants received a reminder while the other half did not. The results suggest a statistically significant relationship between reminders and media access behavior — a reminder can have a demonstrable effect on media access behavior by causing individuals to avoid op-eds that advocate for the viewpoints of a conflicting political party. This has multiple implications (increasing political polarization, expanding influence of private interest groups, etc.) regarding media viewership habits for the individual undertaking decisions that may deprive them of useful information.