The utility function

Here we are with another lecture on simple economics applied to real life. Just to let you know, it is the second lecture of this genre; I published my first and super acclaimed lecture on the incentive to deviate back in January. If you haven’t read it, you should (I am very proud of that post 🙂 ).

During an argument with some relatives over religion – yes, huge mistake! – I started to help myself out of the situation by introducing the simple economics of the utility function. Ok, but what is a utility function?

Utility basically encompasses your preferences. For a deeper analysis, you could learn more about the indifference curves (thanks Wikipedia). This concept is at the basis of the consumers’ choices. However, what I think is that this concept is at the basis of the everyday life.

(little pause, my laptop crashed and I thought I lost the draft)

Is this concept clear? Ok, let’s get going. So, we were arguing over the behaviour of “bigotti” (check the translation here on wordreference.com) and their acting when it comes to certain situations. Things like “turn the other cheek” or “treat others the way you want to be treated” seem to disappear, for example, when they see homeless people begging for money, or when there is an argument between some people. You can say there is good and bad behaviour.

Not to me.

It’s easier. It comes down to utility (that’s it): are people better off? If the answer is no, they wouldn’t move from the position they are in; conversely, if the answer is yes, then you can be sure they will do something (you can call it self-esteem or else).

So, in the end, there is no good and evil. There is just economics.

Confused much? Not a problem. I always have headaches when I study economics…

As usual, some videos:

1. Ah, Coca-cola, you always surprise me… Right in the feels :’) :

Italian version

 

English version

 

2. If I ever had a physics professor like him, I would be a physicist today… By the way, subscribe to the MIT channel, it’s an incredible source:

 

3. Goats, as always:

 

4. The greatest invention in the last century:

 

“There are more funny videos on the Internet than bad news in the world.”

“There are reasons to believe in a better world.”

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