Game Development Reference
In-Depth Information
the first. Note that marginal utility works both ways. Just as gaining that first $20
was very important, losing it would be tragic.
A person of moderate means (such as a game developer) would find the $20 bill
at least interesting and likely wouldn't turn it down if offered. On the other hand,
that same person may be of the mind to part with it if someone were in need. The
marginal utility of $20 has tapered off somewhat. In this case, gaining $20 is mod-
erately attractive and losing $20, while not pleasant, is only moderately distressing.
For someone who has plenty of twenties lying around, the utility of any given
one of them is low. Getting an additional one is likely not worth the calories you
would burn in raising an eyebrow about it. Likewise, giving one away is just as un-
eventful. In fact, I'm sure that there are people who would not be terribly concerned
if one fell out of their pockets and landed on the street in front of the aforemen-
tioned starving person. After all, what is twenty bucks when you're sitting on twenty
million?
The differences between how these three people view that $20 bill is a function
of how many twenties they already have. The more twenties they have, the smaller
the marginal utility of each individual one that they gain or lose. When placed into
the equation of decisions such as purchasing the warranty on a computer or buy-
ing a $5 latte, these differences in the utility that person places on both the money
and the purchase come into play.
The very fact that utility
can
change is the reason utility is important. If utility never
changed no matter where we were on the scale against which we were measuring it,
it would be far easier to calculate. We could often simply apply a ratio between the
value of an item or action and its corresponding utility. However, the changes in
utility that take place over that scale are what justifies treating utility as a separate
entity from value in the first place. Therefore, much of the discussion about utility
revolves around
marginal utility
—that is, the changes in utility.
The reason marginal utility is important is that it can change as well. In the ex-
ample of the $20 bill above, the utility of the $20 bill was different for the poor per-
son, the average person, and the rich person. Because of that, the marginal utility of
an additional $20 bill was different for them as well. However, there are not simply
three categories of people—poor, average, and rich. There is a continuous transi-
tion between someone who has nothing and someone who has everything. So at
what point does the utility (and likewise the marginal utility) of those $20 bills
change? The answer is that there is a
continuous
change happening. Each additional
$20 bill has a utility. As we move from one bill to the next, the utility changes.
