Overview

This book introduces the concept of general value according to which value has two additive components-monetary and nonmonetary. The nonmonetary component reflects individual perception of value unrelated to the monetary part of it. The fundamental difference between the concept of general value and the conventional concept of value is in the expansion of the concept from monetary only to a more general concept by adding a distinct nonmonetary component. The principle of increasing general value is introduced that states that in every action or transaction the general value for each participant should increase. This principle lays the foundation for value-based decision-making. To make a decision, an individual needs to assess a difference of general values before and after the action or transaction or to order values rather than to accurately calculate the values themselves. General value can be measured either rationally, similar to utility, or with bounded rationality , as suggested in behavioral economics, or in any other way which is appropriate and convenient to use. General value in economics plays a similar role as energy in physics and can be referred to as economic energy. General value constitutes a more comprehensive foundation of economics than traditionally used pure monetary value, and thus, goes beyond the classical, neoclassical, and behavioral approaches in economics. The major methodological challenge on the theory of general value was the measurement of the nonmonetary component of general value. This challenge was successfully resolved by applying the approach of indifferent point, when the monetary component of two choice is varying to reach the point of indifferent choice for an individual. At this point the difference of the nonmonetary values for a choice is equal the difference of the monetary components with the opposite sign. The theory of general value has been successfully applied to various areas of business and economics explaining and optimizing economic activities, which could not be explained or optimized without this approach. Maximization of net present general value is a generalized principal goal of any business, organization, regardless either it is for-profit or not-for-profit, and even an individual. Such an approach eliminates existing uncertainty in formulating principal strategic goals beyond pure monetary approach. The approach of general value has been applied and illustrated for the choice of job, consumer decisions on purchasing products and services. Business competitive strategies and market share analysis have found the better and quantitative explanation with the application of the concept of general value. A special parameter equals the ratio of nonmonetary component to the monetary component of value is introduced that describes the subjective bias in value assessment. The book contains a lot of real-world case studies and examples that help understand the concept of general value and its applicability for solving practical problems in business and economics. The concept of general value is easily extendable to other human activities and decision-making.

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