Sunday, August 14, 2005

Absolute or relitive utility

Richard from Philosophy et cetera in a recent debate on utility proposes the following

"Your recent comments confuse a negative return with the absence of a positive return. These are not the same thing. I suspect this is what's muddling you up."

What he means here is that if you have a two choices between lets say cashing a lotto ticket for first division and selling your winning lotto ticket for five dollars that it is appropriate to think of selling the winning ticket for five dollars as a good thing in which one receives utility and that seeing it as a bad thing is incorrect.

He argues that both of these are positive returns - this intuitively sounds foolish.

So is it best to look at it in this manner? Well two arguments spring to mind

1) The question revolves around practicality - Richard is trying to argue that the problem is unsolvable because both options have in this case infinite positive utility and one cannot decide between them. Usually one would not structure a problem in such a way that you can’t solve it and it is not surprising that it is possible to do such a silly thing as I suggest richard has done here.

2) We have learnt over the years that the way to properly consider anything whether in social setting or physics or economics/accounting is relative to other things. There is no reason why utility should be any different in fact one could argue that there is no valid absolute sense in which to consider it.

However maybe it is possible to defend the absolute definition of utility in this example. Is there some absolute basis against which utility must always be measured in order to be valid?


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