How An Obscure Economics Theory Helped Me Unleash My Productivity

In 1991, I took an economics class that changed my life. My professor spoke broken English, often responded to students dismissively, and by all other accounts, did little to advance the college teaching profession. Yet, she told one impactful story that sparked an idea, one that enabled me to curb bad habits, eliminate destructive behaviors, and bulletproof myself against distractions for more than 30 years.

The lesson centered around a standard theory taught in most entry-level microeconomics courses — The Law of Diminishing Marginal Utility. It states that as the consumption of a product increases, the marginal utility derived from each additional unit declines. Utility refers to satisfaction, pleasure, or some other perceived benefit.

If that sounds like esoteric mumbo jumbo, read this explanation, paraphrasing what my professor told me more than 30 years ago.

Imagine you’ve just run a 10K race in 90-degree heat with no shade and now water. You cross the finish line, sweat dripping from every pore of your body. The extreme dryness of your throat creates a sandpaper-like tenderness when you swallow. You rush to the finisher’s table, where volunteers fill cups of water. A sympathetic helper hands you a cup. It quenches your thirst. On a scale of 1 to 100, the drink’s utility (the benefit) equals 100 because the water satisfies your overwhelming desire to quench your thirst. You grab a second cup. That, too, satisfies your craving but not quite so as that first cup. The third cup yields only modest satisfaction.

With each successive cup of water, the satisfaction decreases. By the time you drink your sixth or seventh cup of water, the utility gained from each drink reaches zero. Your stomach feels full. If you keep going, you’ll reach a point where each glass results in negative utility; your stomach aches, and your electrolyte balance reaches dangerous levels.

That’s the law of diminishing marginal utility. With each subsequent consumption, you gain less benefit, which could eventually lead to injury if the behavior continues.

That story stuck with me for the last 30 years because it illustrated how such a theory, if applied to life, can yield positive habits and curb destructive behaviors where overconsumption or excessiveness results in harm.

Diminishing marginal utility as an impulse control tool

Let’s pretend a server at a restaurant delivers you a thick slice of cake. That first bite would provide a utility of 100 — defining the utility by how good it feels rather than how it impacts your health.

When you get to the fourth bite, your stomach feels stretched, and it no longer brings you pleasure or satisfaction. If you keep going, you’ll eventually feel sick (negative utility).

We’ve all heard the parable, everything in moderation, but how to do it is another matter. Whether it’s a glass of wine, indulging in social media, worrying about finances, or enjoying a sugar and fat-laden dessert, we can use the law of diminishing marginal utility to create healthy habits, minimize distractions, and curb obsessions.

Think of everything in terms of pleasure

We spend our days engaging in various behaviors: responding to emails, daydreaming, watching Tik Tok videos, eating, and a thousand other actions. Some of them are routine, like brushing your teeth, washing your hands, and other necessary business we do to tend to our bodies.

When you begin this exercise, ignore the routine actions. Instead, focus on activities you do for pleasure or distraction. It’s these behaviors where overindulgence leads to adverse outcomes of lost productivity and unhealthy habits.

Take a time-out

Last weekend, I took my kids out for ice cream. The medium-sized cup tempted me, but I took a “time-out” to force my logical brain to evaluate what was in my best interest instead of allowing my emotions to dictate my choice.

I knew if I had finished a cup of that size, I’d hit negative utility before reaching the end, so I ordered the small.

That kind of preemptive intervention comes easier after you condition yourself to think this way. When you begin this journey, it’s good enough to recognize you’re primed for overindulgence, distractions, or other destructive behaviors at any point in the process and take a “time-out.”

At first, it will seem awkward to interrupt yourself while doomscrolling or pounding down shots. In time, it’ll register in your subconscious.

Assign an initial utility score

When you engage in any kind of behavior where too much consumption can yield poor results, assess on a scale of utility. How much satisfaction do you get out of eating that piece of cake or doomscrolling through Twitter?

Assign a score of 100 (on a scale of 1 to 100) after consuming the first unit, which you define according to the activity. It could equal a spoonful of ice cream, a set time on social media or television, or a glass of beer — whatever makes sense.

Reassess your score after each unit

Let’s suppose you’re working on a novel, and you somehow distract yourself by watching Tik Tok videos. Step one, define a unit as one video. Next, assign a score of 100 after your initial clip.

As each interval (video) passes, reassess your score.

Let’s assume you assign a score of 88 to your second video. Yes, it’s subjective, but that’s okay. It’s merely a mechanism for you to disassociate from these behaviors. Continue the process with each unit (video) consumed. You’ll find that your satisfaction decreases each time.

It might seem daunting, but you’ll find that most of the behaviors you engage in for pleasure or distraction repeat themselves, so once you develop a system, you keep reusing it unless you do such a great job of overcoming the destructive behavior that you move onto a new one.

Quit when the utility equals or falls below 50

Have you ever felt angst after spending too much time on social media? Have you ever felt like, “Man, I wish I hadn’t had that last drink?”

That’s why we use 50 as a threshold. It’s where our diminishing marginal returns become apparent.

Our logical mind kicks in at this stage and reminds us of our economics lesson. Eventually, we reach a negative benefit where further engagement harms us or results in outcomes we’d like to avoid. That type of recognition makes it easier for us to quit while we’re still ahead.

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