By Tony Samson
THE CHARTING of pleasure and boredom is covered by an economic principle that says that the enjoyment of even the most wonderful experience is bound to fade, as is our initially hearty appetite for certain subjects in the news like released prisoners, pyramid schemes, and love triangles.
The economic law of diminishing marginal utility states that: “As a consumer consumes more and more units of a specific commodity, the utility from the successive units goes on diminishing,” This axiom was established by the German economist H. Gossen in 1854.
In a buffet lunch, after the first plate is cleared, each subsequent visit to the food-laden table becomes less and less pleasurable. One gets a bloated feeling on the fourth plate and eventually stops eating when the prospect of one more spoonful of fried rice invites retching. The pricing for “all you can eat” offerings presumes that at some point, the customer must stop eating and that enough customers do so early enough.
The curbing of enthusiasm for the heaping plate is enforced with a fine. The restaurant punishes with a surcharge the greedy diner who leaves uneaten food on his plate. (Are the areas under the tables filled with dumped leftovers?)
The other possible example is sex, which we choose not to elaborate on. Here, the declining marginal utility is dictated by physical limitations. In the case of the buffet, the demand side just can’t cope with all that food being shovelled in, owing to the limits of stomach storage. In the other example which we are avoiding, even the possibility of a third sortie verges on the astonishing. Thus, we see that in these two examples of the law of diminishing marginal utility, there is a “physical cliff” (that’s the correct spelling) where human capacity and added pleasure fall off precipitously, along with whatever anatomical parts are required to be alert.
It is this law of marginal utility that makes newly wealthy people like boxers and lotto winners feel the declining pleasure that more purchases of goods and properties bring. They may buy more designer bags, stay in more luxurious hotels, and regularly fly business class. But as this consumption pattern becomes routine, it starts to lose its novelty and then becomes merely boring, bringing on the onset of ennui and then contempt. (Why not buy my own plane?)
Anyway, the ability to purchase more expensive items may come to a screeching halt anyway when purchasing power declines.
The law of marginal utility affects other appetites too, like the one for news. Just as there is the phenomenon of donor fatigue for the tendency to hit the same people with deep pockets for various donations to worthy causes, media that feature the same news subjects over and over create tiredness in the audience, with “news fatigue” for certain topics.
While the need to be informed is fed on a regular basis, the subject for coverage has to vary. The reaction of pushing away the still full plate because of buffet stuffiness is also felt when the same information feeds the news cycle.
The effect of marginal utility leads to another area psychological phenomenon called “adaptation.” If you come in from the blazing heat, say after a walking tour of old houses in Taal, sitting back in an air-conditioned van with the cool pleasure offered in the first minute is almost sensual. But as soon as the body adapts to the new climate, the feeling of joy slowly dissipates. This adaptation mechanism also applies to continuing pain and discomfort. One can even get used to working with toxic office mates encountered daily. The psyche adjusts to its stable state by making these irrelevant, unless they happen to be on top. Then the process is reversed — I have another name for the redundancy list.
Does this law of diminishing marginal utility also apply to money as a commodity? Are those already rich going to push away more wealth opportunities because of the diminishing pleasures of what money can buy? (Of course, not.) Anyway, there are always new goods and services to try. And the feuding heirs and bill collectors are still lining up for the buffet… bringing their empty plates.
Tony Samson is Chairman and CEO, TOUCH xda