The Money Value Function

Programming

I've loosely defined the value function (link) to only compare two "things", without further specifying what "things" it can take, because some things we put in there (like CloseToFamily) are fundamentally non-numeric properties. But some people have their own specializations of this value function. One that almost nobody will admit to using, but a lot of people live by, is the Money value function. This function takes just one argument and returns a single concrete number with the unit "Dollars" (or relevant local currency).

I do not recommend using the Money value function personally, but probably not for the reasons you think. It's not that it is an intrinsically bad idea, it is that humans have a proven track record of being unable to use this metric rationally; the problem lies with us, not the metric. Part of what may help you to rationalize this is to recognize that while I may be willing to sell eight hours of my day to my employer for $XXX, it does not mean that I will sell the next eight for the same price. If you balance the need to be with your family against the more fundamental need to provide for them and recognize how values shift over time, you can "get away with" using this value function. Still, it's tricky; I don't do it. I think conventional wisdom on this topic is essentially correct, though as usual, wrong about why.

I do not recommend this function for personal use, but it is a value function you should become familiar with, because it is the one in use by businesses.

This sounds horrible, but the horror doesn't intrinsically come from using a dollar-based function. It comes from the valuation the business places upon the non-concrete factors like ``employee happiness'' and other such things. Contrary to popular belief, no company can afford to put a negatively-infinite valuation on employee happiness, nor can they afford a true zero (if nothing else local labor laws, unions, or if necessary vigilante justice will impose some lower limit), but certainly very low values can be used.

It is the nature of that function that differentiates companies, not whether or not they have one.