Construct · 1 fields · 5 citations

diminishing marginal utility: a standalone construct

One name. One construct. A landmark on the map.

● anchor · a standalone construct Nearest construct by meaningSay's lawcompare the meanings
How to read this

Every construct on the map is compared with every other by the meaning of its definitions, and the closest one is surfaced here. The nearest construct to diminishing marginal utility is Say's law.

Hold this as a prompt, not a verdict. Two constructs sitting close in meaning is a reason to read them side by side and decide for yourself whether they are one idea under two names. It is not proof that they are. Compare the meanings in the Collider.

diminishingmarginal utility1 CONSTRUCTMarginal utility lawGOSSEN · MARGINAL UTILITY

A single standalone construct; nearby constructs are located against it in the Collider. Tap a field for its definition, unit, and measures.

Economics

Each added unit of a good yields less extra satisfaction than the one before

Hermann Heinrich Gossen first stated the principle as a general economic law in his 1854 work Entwickelung der Gesetze des menschlichen Verkehrs, now known as Gossen's first law: as a person consumes more of a good, the extra satisfaction, or utility, gained from each further unit falls, approaching zero at the point of satiation. An earlier precursor appears in Daniel Bernoulli's 1738 analysis of risk, where he argued that a given gain in money is worth less to a rich person than to a poor one, an early statement of the same idea applied to wealth. The principle was rediscovered and placed at the centre of economics in 1871 by William Stanley Jevons in The Theory of Political Economy and, independently, by Carl Menger in Grundsätze der Volkswirtschaftslehre, whose marginalist revolution rebuilt value theory on the utility of the last, or marginal, unit rather than the total. The construct is distinctive because it supplies the standard economic explanation for the downward-sloping demand curve and for why buyers will pay less for each successive unit, and it underlies the concave shape of the utility function used across consumer theory, welfare economics, and the economics of risk.[1][2][3][4][5]

Unit
A behavioural law about utility: the marginal utility of a good declines as the quantity consumed rises
Recovery means
Not applicable
Measured by
Inferred from choice and demand data, and estimated through the parameters of utility or demand functions (for example a concave, diminishing-marginal-utility form) in consumer theory and controlled experiments

Next

Run it through the Collider, or take the citations with you.

See how diminishing marginal utility sits against neighbouring constructs in the Collider, or export every reference on this page in one click.

Open in ColliderExport BibTeXReport this entry

Nearby constructs

utility3 fields · 3 citationsjingle · one word, three constructspreference4 fields · 7 citationsjingle · one word, four constructsrational choice4 names · 7 citationsjangle · one assumption, three disciplines

References

  1. Gossen, H. H. (1854). Entwickelung der Gesetze des menschlichen Verkehrs, und der daraus fließenden Regeln für menschliches Handeln. Friedrich Vieweg und Sohn.
  2. Bernoulli, D. (1954). Exposition of a new theory on the measurement of risk (L. Sommer, Trans.). Econometrica, 22(1), 23–36. (Original work published 1738) https://doi.org/10.2307/1909829
  3. Jevons, W. S. (1871). The theory of political economy. Macmillan and Co.
  4. Menger, C. (1871). Grundsätze der Volkswirtschaftslehre. Wilhelm Braumüller.
  5. Stigler, G. J. (1950). The development of utility theory. I. Journal of Political Economy, 58(4), 307–327. https://doi.org/10.1086/256962

Cited on this page?

Confirm your construct, or correct us.

If your work is cited behind one of these entries, you know better than we do whether we captured the meaning right. Confirm it, suggest an edit, or dispute it, and your name goes on the entry as an author who has checked it, linked to your ORCID.

Claim your construct