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Behavioral Mathematics for Game AI by Dave Mark

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Changes in Marginal Utility

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 example of the $20 bill above, the utility of the $20 bill was different ...

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