"Utility" is a word used by economists to mean the pleasure,
satisfaction, usefulness, or whatever other value a person gets from a
product or service. Gaining utility is the reason why a person buys a
product or engages in an activity. Just like businesses make decisions
in such a way as to maximize total profits, individuals make decisions
in such a way as to maximize their "total utility." Economists view
people as "utility-maximizing" agents. Through an economist's eyes,
we're all going through our lives making constant comparisons
choosing minute-by-minute what to do, what to eat, what to buy, what to
wear, what to say, and everything else, and every time we choose, we do
it so as to increase our total utility as much as possible. Imagine you
are standing in an ice cream store and choosing a flavor what an
economist sees is that your brain is rapidly going through all the
choices, figuring out how much utility you'd gain from a scoop of
strawberry versus a scoop of rocky road and so on, and then picking the
one that gives you the most utility. (Notice that utility has to be
predicted we could be wrong in our pick, but we do our best given the
information we have. I could decide that strawberry is my pick for
today that's the flavor that I prefer right now the one that will
give me the most utility. And then I might discover, to my dismay, that
it doesn't live up to my expectations and I might WISH I could change
my mind. It happens. So, our choices are actually based on our
"expected" utility gains.)
Okay there is a lot more I could say about "utility" and if you have
objections to this way of seeing the world, we can talk about them.
But I'll leave that for later and, after introducing one more idea,
I'll move on to what this has to do with children and
First, imagine you're in that ice cream shop and you've bought that
strawberry cone because it had a high utility value to you. You eat it
up and it is delicious and you compute the expected utility of ANOTHER
ice cream cone and decide to buy one. You eat it. YUM. Now you compute
the expected utility of a third ice cream cone. So what do you think?
Is the 2nd ice cream cone going to give you as much ADDITIONAL utility
as the 1st did? Will the 3rd one be expected to add as much to your
total utility as the 1st or 2nd ones did? What's going to happen as you
eat more ice cream cones? After you've had one, the expected utility of
the next is lower than the expected utility was for the first. And
after you've had two, the expected utility for the third will be lower
than the expected utility for the second one was. They still might have
value to you, they still give you utility, just not as much extra
The "extra" utility you get from having "one more" of something, is
called "marginal utility."
And - marginal utility goes DOWN as you have more and more of the same
Even if you chose different flavors for each of your ice cream cones,
you'd have chosen the highest-utility flavor first and so subsequent
cones would provide lower and lower marginal utility.
This way of looking at choices is applicable to almost everything we do.
What's your favorite thing to do? Watch movies? Read a book? Garden? Go
to Disneyland? Why don't you just do that all the time and nothing
else? I mean if it is your favorite, then doesn't it give you higher
utility than anything else? Why do you ever stop doing it?
The answer is that as you do more and more of something, the marginal
utility of doing even more of it, goes down. As its marginal utility
goes down, other things start to look better and better.
When you restrict an activity, you keep the person at the point
where the marginal utility is really high.
When you only allow a limited amount of TV, then the marginal utility
of a little more tv is high and every other option looks like a poor
one, comparatively. Watching more TV becomes the focus of the person's
thinking, since the marginal utility is so high. Relax the constraints
and, after a period of adjustment and experimentation to determine
accurate marginal utilities, the focus on TV will disappear and it will
become just another option.
More by Pam Sorooshian