The Relative Theory of Value: For Dummies 2 (the alternate definition/function)

  1. relative value of a good (ex-ante consumption) = r(inherent properties of a particular good, state of the consumer)
  2. relative value of a good (ex-post consumption) =   sum of all benefits. This is consequential.  It is easier to determine the relative value of a good using this method/function. The only disadvantage to the ex-post method is that the consumer is hoping to determine relative value before consumption in order to compare it to costs and opportunity cost of consuming other goods.  The only value that the ex-post relative value provides is the information it generates in helping someone make future decisions.
  3. Both forms of the relative value of the good are the same.  The ex-ante form is a mechanical prediction of the ex-post form. In otherwords given the inherent properties of the good and the conditions of the consumer one could perfectly predict the benefits that follow consumption.
  4. benefits in terms of what?  benefit is not a reference to mere monetary benefit.  Ego-Utilitarianism says the only benefit of concern should be in terms of “self” existence. “Self” is all the criteria that define you.

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