If it's unequivocally true, how about a source that shows scope does not impact it?

I'm simply stating that money does not have fewer uses as one gets more of it. Usually the person's scope changes to include new uses that were not previously possible. The important thing to note is that utility is being used in mixed definition here. Strictly speaking it's definition is happiness or satisfaction. The part about having less use doesn't necessarily match this.

Diminishing marginal utility is an axiom over fixed magnitude amounts of a good. Bill Gates still gets less out of an additional $10 even with new opportunities for philanthropy than a panhandler who is hours from starving to death and currently has $0. "Diminishing" doesn't mean it has to go to zero, but Bill Gates is not going to be in any situation where some number of dollars given to him on top of what he has means the difference between life and death.

Heck, this exact fact is the very reason why Bill Gates engages in philanthropy. He realizes that other people need the money more than he does.

Yes, but that wasn't what was explained.

"Money also has diminishing marginal utility, so as you accumulate more of it, at some point it has less use."

The additional money does not have less use. It's just not going to add as much to quality of life or dictate "life and death". There are still many uses for it, so of which may not be possible with lower amounts.

If you consider "add to quality of life" a synonym for marginal utility I think you may be in agreement.

Yes, $10 buys the same Mcdonald's lunch regardless of how much money one has, but two people, one with $0 and one with $1bn in net worth will be excited about that lunch to very different degrees.

"Money also has diminishing marginal utility, so as you accumulate more of it, at some point it has less use."

This thread in response to this, to point out that the use of money is not the same as the marginal utility.

Diminishing marginal utility of money means that each additional dollar spent results in a smaller increase in quality of life. This is true of all consumption goods. For example, if you don't have a car, and you buy a car, your quality of life will improve a lot. If you buy a second car, it will improve only little. By the time you have 15 cars in your garage, buying another car will do nothing to improve your quality of life, or it could even worsen your living conditions.

Yes, but that wasn't what was explained.

"Money also has diminishing marginal utility, so as you accumulate more of it, at some point it has less use."

The additional money does not have less use. It's just not going to add as much to quality of life. There are still many uses for it.

The word utility is being used in a fashion different from your lay understanding.

Maybe you can tell me what you think it means and what I think it means then. Investopedia and my work in finance both seem to support my take.

Sure. Utility, in this sense, is a proxy for the enjoyment/satisfaction gained by the consumer from the thing.

You seem to be interpreting utility in terms of the quantity of things the money can be used for or in terms of the societal benefit that can be obtained from the money, it is not entirely clear.

"Money also has diminishing marginal utility, so as you accumulate more of it, at some point it has less use."

This thread is in response to this, to point out that the use of money is not the same as the marginal utility. Its mot like having a bunch of money makes it less useful or have fewer uses.

> use of money is not the same as the marginal utility

Yes, but as I said above, in this case having use is defined relative to promoting your own satisfaction as a consumer.

I think you are trying to tease apart "utility" vs "use", but to have utility is the property of having use. It's a question of what the utility/use is in reference to, and for economists, that utility is in reference to preference satisfaction by the consumers.

And even when using that definition, it doesn't mean there is less use. It will add marginal use for each addtional dollar, and increase overall use.

It's at best a strong hypothesis. There can be situations where utility is constant or even increasing (not necessarily monotone). If I can only afford one shirt then actually going for a situation where I can own three shirts could make my life a lot simpler, similarly, being able to afford a car could have strong positive effects.

I think, the idea that getting rich does not create a lot of additional joy from diminishing utility is one the best fairy tales ever invented.

> think, the idea that getting rich does not create a lot of additional joy from diminishing utility is one the best fairy tales ever invented.

It's diminishing marginal utility. Every single comment I've gotten disputing this either misinterprets the word "marginal" or the word "utility", I encourage all of y'all to take an economics course.

Sorry, just skipped the "marginal", but my point stands: the marginal utility does not need to drop. I could enjoy my 10th car just as much as my 9th... or even more (and I have taken some economics courses). Similarly, going from $1B to $2B might more than double my total utility, nothing is stopping that from happing a priori

Edit: granted, there are a lot of observable situations that do indeed show diminishing marginal utility, but I think the concept is often too much taken at face value when actual data or analysis is scarce and the marginal utility might behave in a more complex way

Yes, because economics is a social science, none of its axioms are "a priori" in the same sense that they might be in math.

That said, the empirical evidence is pretty overwhelming in favor of diminishing marginal utility of money, in addition to the fact that it just makes sense. Actual data on this phenomena is not actual as scarce as you seem to be suggesting.

I am aware of some older studies on marginal utility of money for individuals, but they span quite low income/wealth. I have seen some small data that suggest that at the very least the drop in marginal utility is much weaker than previously thought for high wealth brackets. Do you have some pointers to newer data on UHWIs, for example?

I personally have found that there were times when the marginal utility of my additional wealth was growing as I could suddenly do things I could not do before... (while it other times it almost felt like 0)

I sort of agree, but would say that fairy tale part might be better described as a psychological effect, but still consistent with your questioning it as other than a hard economic fact. What I mean is that the person's psychology may change as they become accustomed to a specific standard of living. For example, if someone grows up driving new BWMs, they might see it as "normal" and not derive as much joy from it as someone who got a new BWM after working for it for years. So it seems that the axiom is specific to an individual and their psyche, which provides provides few beneficial use cases beyond understanding that if people have 'a lot' of money, then money might not be a strong motivator.

Saying it's an axiom is correct - economists generally pose this as a fact, but where would we end up if it was the opposite, if the utility of money rose with the amount you have?

In other words: if the diminishing utility axiom were true we could start redistributing now, but one would predict the money owners would be against it.

It's proof by contradiction - everyone knows money is political power.

> if the diminishing utility axiom were true we could start redistributing now, but one would predict the money owners would be against it.

If something has diminishing *marginal* utility if doesn't follow that a third party has a right to seize it(property rights, different/tangential topic). Therefore this:

> It's proof by contradiction - everyone knows money is political power.

Is an inconsequential conclusion.