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Value Creation
Published in Mark W. McElroy, The Space Industry of the Future, 2023
In practice, marginalism influences how market pricing works through the concepts of marginal utility and supply. In terms of demand, marginalism says that the market price will reflect value based on the final purchase of a good. For example, if on average people buy two cars, then the market price of a car is based on the utility of that second car, which presumably may be less than the first. The concept of marginal returns also applies on the supply side from continued activation of capital for production. The means of production that are most efficient will always be activated first. As production increases, efficiency decreases and diminishing returns are seen. The marginal cost of producing something is defined according to the last and least efficient unit that is produced. In summary, marginalism defines value as anything that fetches a price in the market. The amount of value is governed by utility, scarcity, marginal demand, and marginal supply. Modern markets function largely according to marginalist principles.
Sustainable Development and Organizational Sustainability
Published in Dalia Štreimikienė, Asta Mikalauskiene, Remigijus Ciegis, Sustainable Development, Leadership, and Innovations, 2019
Dalia Štreimikienė, Asta Mikalauskiene, Remigijus Ciegis
If we analyze the data on individuals in a separate country and at a specific period of time, it is obvious that an individual’s happiness decreases when income drops (Diener and Oishi 2000). However, a significant number of studies reveal that, with the growth of income, the growth of happiness, which is related to the growth of income, decreases. Here the same law of diminishing marginal utility is observed; when the saturation point is reached, every additional dollar provides decreasingly fewer benefits or happiness to a person. The same law affects both individuals and countries, which we discussed earlier, as with the growth of GDP per capita, happiness significantly increases only at a low GDP per capita level. An increase in income of $500 brings much more happiness for an individual whose income is lower than $5,000 per year than for an individual whose income is $20,000 per year.
Mathematical tools for research on economic processes
Published in Ford Lumban Gaol, Natalia Filimonova, Irina Frolova, Ignatova Tatiana Vladimirovna, Inclusive Development of Society, 2020
V.B. Dzobelova, A.V. Olisaeva, M.V. Galazova, N.B. Davletbaeva, O.A. Ishchenko-Padukova
One has to deal with the concepts and methods of mathematical analysis in economic practice quite often (Rytova, 2017). For example, limit values and the derivative are used in the study of the dependence of demand on the price of goods. So, the derivative of the demand function describes a 1-point increase of price with a decrease in consumer demand. The derivative of the supply function characterizes the increase in the supply of goods from the producers with a 1-point increase of price. Marginal utility, i.e., utility from the acquisition of one additional unit of goods, determines the derivative of the utility function.
Identification of waterways maintenance significant units using secondary data and Multi-Attribute Utility Theory
Published in Structure and Infrastructure Engineering, 2022
Francesca Marsili, Jörg Bödefeld
In the MAUT method, each attribute is described by a utility function which is a mathematical representation of the relative desirability of the values of the attributes to the decision-maker. The utility function scales the attribute values between 0 and 1, so that non-commensurable units can be compared. It is important to emphasize that the decision-maker encodes his preferences for the values acquired by the attributes in terms of cardinal utility numbers, which reflect the decision-maker ordinal ranking. In mathematical terms, the marginal utility function represents a mapping into the real line of the degree of preference of the decision-maker for the values of a certain attribute, which allows preferences to be expressed numerically.
How to mend the dormant user in Q&A communities? A social cognitive theory-based study of consistent geeks of StackOverflow
Published in Behaviour & Information Technology, 2023
Sohaib Mustafa, Wen Zhang, Muhammad Mateen Naveed
The reputation point is an accumulated score of a user on a Q&A platform that represents a user's credibility. All the activities users perform on a Q&A community provide them with some points or deduct their points. Addition in points means the increase in social status and credibility of the user, while deduction in points is a vice versa phenomenon. Reputation points are a mechanism designed to motivate users to contribute quality knowledge so that they are socially praised and treated as credible sources of knowledge dissemination. A high reputation score does not always mean that contributed knowledge is authentic. Previous studies proved reputation as a significant control factor behind knowledge contribution (Cavusoglu, Li, and Kim 2021; Wang et al. 2021). According to the law of diminishing marginal utility, if everything else is constant, the marginal benefit that may be received from an extra unit decreases with increasing consumption. The incremental improvement in utility that comes from consuming one more unit is referred to as marginal utility. The economic concept of ‘utility’ refers to a feeling of contentment or well-being(Ormazabal 1995). For individuals with a greater reputation, the favourable impact of reputation gains on knowledge contribution reduces, such that the effect is less positive(Chen, Baird, and Straub 2021). With this discussion, we believe increased reputation can inversely influence the quantity and quality of knowledge contributed in Q&A communities. Hence we postulate H4. An increase in reputation negatively influences the knowledge contribution (quantity & quality).