NYU Stern

DECLINING MARGINAL UTILITY

 

“The effect of wealth in the production of happiness goes on diminishing, as the quantity by which the wealth of one man exceeds that of another goes on increasing: in other words, the quantity of happiness produced by a particle of wealth (each particle being of the same magnitude) will be less and less at every particle; the second will produce less than the first, the third than the second, and so on.” Bentham, Pannomial Fragments, chapter IV, section 5


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