Transferable Utility

Transferable utility refers to a concept in economics where the value or satisfaction derived from a resource or good can be easily transferred from one person or entity to another without any loss. This means that the benefit or utility isn't tied specifically to the original owner; instead, it can be reassigned, sold, or redistributed. For example, money or financial compensation is a form of transferable utility because it allows benefits to shift between individuals or parties efficiently. This concept is useful in analyzing negotiations, contracts, and resource allocations where flexibility in transferring value is important.