Global Journal of Management and Business Research, B: Economics and Commerce, Volume 20 Issue 1

The Marginal Diminishing Returns/Marginal Increasing Returns in the Pursuit of Happiness Prof. Alexandru Trifu Abstract- We are dealing with a psychological aspect of our actions and behavior and, consequently, we are focused on the Psychological approach of Marginalism. Starting with the German economist of the 19th century, Hermann Heinrich Gossen, with his Law of the Marginal Diminishing Returns, in fact his first law, passing through the analyses and approaches of this theoretical products, along with practical examples from around us, from media information, to reach the point in which to affirm that either in the diminishing returns, or increasing returns, it is a threshold above or beyond which the feeling of pleasure/fullness, even a state of happiness, tends to disappear. This survey regards only the consuming/purchasing of goods in the pursuit of happiness, because this issue is largely and more complex as far as we can see at first sight. Therefore, no abnormal actions to have more and more units of the same kind lead to get pleasure and happiness.We deal with the stock of a thing/commodity, in terms of increasing or diminishing, affecting the income, the wealth of a person and, by consequence, the good mood or even happiness. In this psychological enterprise, people must take into account the marginal utility of a commodity, thing, not to be pushed forward by snobbish desires to have more and more. In our opinion, we consider that the Happiness is organic linked with each people’s personality and human specificity (body and soul), or evolution in life and activity. Keywords: marginal utility, diminishing returns, satiety, happiness. I. T he theoretical B ackground he German economist Hermann Heinrich Gossen (1810-1858) is considered a proto-marginalist and part of the third emerging direction of the Marginalist School, that is the Austrian School of Economic Thinking . Based on general observations on human behavior, the theory of Gossen includes, in fact, 3 ( three) laws, of which the first one is that interesting us in the present analysis. The Austrian clasic approach of economy, from the psychological point of view , is based on a causal vision , on the subjects’ perceptions , which represent the prime reality and on the basis of which the economic theory is built. Even this insight into the depth of the analysis of the phenomena and economic categories and institutions gives the specificity of the Austrian School of Economic Thought . The important representatives of this school (Carl Menger, Friedrich von Wieser, Eugen von Böhm- Bawerk) laid the foundations of a coherent methodology for economic analyses, targeting problems related to the human being in its complexity and progress (Trifu, 2005). But, roots of this economic theoretical element are found in the works of Mercantilist and representatives of Classic Economics, such as James Steuart, Jacques Turgot, Ricardo and others. And an important aspect which should be taken into account in our exposure is that one of the application of the Law of Diminishing Marginal Returns on short term , because otherwise, the conditions of the business and natural environments, i.e. the rest of the factors will change on medium and long term. The law of diminishing marginal utility , the vector of the present analysis, is telling us that the utility/pleasure/satiety from each added/successive unit of a commodity diminishes. Known also as the Law of Satiable Wants , this one highlights that we are in the presence of decreasing rate of utility, even the more consume of a commodity leads to an increase in the total utility. This is an economic law, whose action is not known by too many people, that means the manifestation of links of resistance, essential and with permanent character in the economic/business environment . The keyword of this analysis regards a break point/maximum point in adding marginal units from a specific commodity, point after which the benefits gained, the pleasure, satiety, happiness will start decreasing. Here there are Gossen’s laws of marginal utility , emphasized in his main work published in 1854 (Gossen, eng. ed. , 1983): 1. The first one, meaningful called "The law of diminishing marginal", states that the magnitude of a given pleasure (desire, we may add) decreases continuously if the person (persons) continues (continue) to consume additional units in order to satisfy this pleasure until satiety is reached . 2. The second one, presumes that "for a person who is free to choose between several desires/pleasures, but whose time is insufficient to satisfy them all" . 3. The third law, in the terms of scarcity, as a pre- condition for economic value, affirms that "a good T Author: Ph. D. University “Petre Andrei” of Iasi. e-mail: trifu.alex@gmail.com © 2020 Global Journals 9 Global Journal of Management and Business Research Volume XX Issue I Version I Year 2020 ( ) B