<p>If you measure how well off he is by his utility, then no. His utility is 10 in both scenarios.</p>

<p>The fact that career A is open to him increases his utility more in the second scenario than in the first scenario, this is what the "net utility benefit" shows you.</p>

CC BY-SA 4.0
2019-08-18T09:01:26.220Z
2019-08-18T09:01:26.220Z
Giskard
<p>He is not better off in absolute terms because the utility in both cases is 10, assuming nothing else changes.</p>
<p>However, the value of career A has now gone up significantly for him, and he would be willing to pay much more utility (for example, in the form of time, sleep, effort, relationships, etc.) to keep that career because the alternative is having no career. Whereas before, if the cost of keeping career A had gone up significantly, he would rather switch to career B.</p>
<p>For example, an antagonist would be able to blackmail the person by threatening to sabotage his career unless the person paid him the equivalent of 9 utility, thereby decreasing his net utility benefit back to 1.</p>
<p>Therefore, he is now worse off in the long run, and having a low net utility benefit with a high absolute utility is preferable because it increases stability.</p>

CC BY-SA 4.0
2023-06-08T01:11:51.753Z
2023-06-08T01:11:51.753Z
Sepehr Nazari
<p>The situation you described can be represented as follows:</p>
<ul>
<li>Situation 1: Choose an amount from the following set <span class="math-container">$\{0,9,10\}$</span></li>
<li>Situation 2: Choose an amount from the following set <span class="math-container">$\{0,10\}$</span></li>
</ul>
<p>If you prefer more money to less, then in both situations, you'll choose 10. So, theoretically speaking, the availability of a less desirable option in the choice set in situation 1 must not have any real impact on your satisfaction level.</p>
<p>But in reality, not all individuals behave in this way. Some people might derive more satisfaction from the fact that they are choosing from a larger set of options, so they may prefer situation 1 to situation 2. On the other hand, some people might prefer situation 2 over situation 1 because they feel happier when there is no close competition for the option they have chosen available in their choice set.</p>

CC BY-SA 4.0
2023-06-08T06:09:20.963Z
2023-06-08T06:09:20.963Z
Amit
<p>My question is the following:</p>

<p>Let's say a person has two career choices. He would be succesful in both, but in one of them he is slightly better and thus he will do better. So let's say career A will bring him a utility of 10 and career B a utility of 9.</p>

<p>So career A will bring him a 1 net utility benefit, due to the opportunity cost of 9 of pursuing career B.</p>

<p>Now suppose that for whatever reason, career B is not a choice anymore for him.</p>

<p>Is he now better off, from the fact that his net utility benefit is 10 and not 1? Why or why not?</p>

<microeconomics><utility><consumer-theory>
Opportunity Cost effect on benefits
LeoArtaza
# Opportunity Cost effect on benefits

(Asked by: username_0 on 2019-08-17)

My question is the following:

Let's say a person has two career choices. He would be succesful in both, but in one of them he is slightly better and thus he will do better. So let's say career A will bring him a utility of 10 and career B a utility of 9.

So career A will bring him a 1 net utility benefit, due to the opportunity cost of 9 of pursuing career B.

Now suppose that for whatever reason, career B is not a choice anymore for him.

Is he now better off, from the fact that his net utility benefit is 10 and not 1? Why or why not?

**Tags:** microeconomics, utility, consumer-theory


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## 3 answers

### Answer by username_1 on 2019-08-18. Score: 2

If you measure how well off he is by his utility, then no. His utility is 10 in both scenarios.

The fact that career A is open to him increases his utility more in the second scenario than in the first scenario, this is what the "net utility benefit" shows you.


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### Answer by username_2 on 2023-06-08. Score: 0

He is not better off in absolute terms because the utility in both cases is 10, assuming nothing else changes.

However, the value of career A has now gone up significantly for him, and he would be willing to pay much more utility (for example, in the form of time, sleep, effort, relationships, etc.) to keep that career because the alternative is having no career. Whereas before, if the cost of keeping career A had gone up significantly, he would rather switch to career B.

For example, an antagonist would be able to blackmail the person by threatening to sabotage his career unless the person paid him the equivalent of 9 utility, thereby decreasing his net utility benefit back to 1.

Therefore, he is now worse off in the long run, and having a low net utility benefit with a high absolute utility is preferable because it increases stability.


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### Answer by username_3 on 2023-06-08. Score: 0

The situation you described can be represented as follows:

* Situation 1: Choose an amount from the following set $\{0,9,10\}$
* Situation 2: Choose an amount from the following set $\{0,10\}$

If you prefer more money to less, then in both situations, you'll choose 10. So, theoretically speaking, the availability of a less desirable option in the choice set in situation 1 must not have any real impact on your satisfaction level.

But in reality, not all individuals behave in this way. Some people might derive more satisfaction from the fact that they are choosing from a larger set of options, so they may prefer situation 1 to situation 2. On the other hand, some people might prefer situation 2 over situation 1 because they feel happier when there is no close competition for the option they have chosen available in their choice set.


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