The utility of money is logarithmic across standard wealth levels
Economic and evolutionary literature largely supports the concept that the utility of money behaves logarithmically, exhibiting diminishing marginal returns as wealth increases, though some methodological cautions exist regarding how happiness equations measure this phenomenon.
The retrieved literature contains strong theoretical and evolutionary economics papers (such as [3], [6], and [8]) demonstrating that the logarithmic utility function appropriately models the diminishing marginal utility of wealth and is selected for in decision-making under risk. Conversely, paper [9] offers a methodological critique regarding whether happiness equations truly capture this utility or merely reflect reporting functions. Overall, the foundational consensus in economic theory heavily leans toward support, making SUPPORTED the appropriate verdict.
Kerem Uğurlu. Terminal wealth maximization under drift uncertainty. 2024. https://doi.org/10.1080/02331934.2024.2324143
Utilizes logarithmic or power utility for wealth maximization under uncertainty.
Andrew J. Oswald. On the Common Claim that Happiness Equations Demonstrate Diminishing Marginal Utility of Income. 2005. https://doi.org/10.2139/ssrn.826388
Argues that happiness equations and subjective well-being data do not conclusively prove the diminishing marginal utility of income, distinguishing utility concavity from reporting function concavity.
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Francisco J. Navarro-González, Yolanda Villacampa. A Foundation for Logarithmic Utility Function of Money. 2021. https://doi.org/10.3390/math9060665
Provides a theoretical foundation for the logarithmic utility function of money under consumer choice constraints.
Hans-Werner Sinn. Weber's Law and the Biological Evolution of Risk Preferences: The Selective Dominance of the Logarithmic Utility Function. 2002. https://doi.org/10.2139/ssrn.343622
Demonstrates the evolutionary and selective dominance of the logarithmic utility function in risk preferences.
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