Consuming until marginal utility = 0 -- is it really optimal?

OK, that's helpful. We are talking about different things. In economics, the idea of consuming until marginal utility equals zero refers to something different from what you are considering. This says nothing about your idea; just about how people usually use this concept.

Right I'm delving more into Behavioral here than the Neoclassical definition.

But to take your point head on, the idea that we can modify our preferences through intentional, reflective action is indeed generally absent from economics. If you and Seneca are right, and people can choose to enjoy bread as much as other people enjoy great riches, then here's a question to you: why aren't we seeing more people doing that? i.e., retreating to caves and strictly restricting their exposure to modern comforts? Is it lack of will and self-awareness or because people don't really enjoy this stoic lifestyle?

Again I think it's behavioral lack of self-awareness. People aren't aware that their baseline shifts so they overconsume when they might actually be happier if they reduced their consumption slightly.

There is an old latin phrase that roughly translates to "Hunger is the best sauce." Which is that food tastes better if you let yourself go slightly hungry before eating. I take this principle to heart, and I try to fast as long as I can until it's severely uncomfortable, and then I eat, and every meal I have tastes like a wonderful thanksgiving feast. Whereas the people just grinding through 3 routine meals a day probably don't get nearly as much appreciation as I do.

it turns out there actually is an economic concept called "habit persistence" where your utility today is a function of the change in your consumption between today and yesterday. So the ideal consumption path is one of slow, steady growth rather than one where you jump to the satiation point immediately and then plateau. You will get an intense rush of happiness as soon as you upgrade, but then the effect will wear off and you will adjust your baseline to the new consumption level.

I just think economics could focus more on this point. I don't see a lot of work or emphasis on it maybe because it's too complicated to model and economists like clean assumptions.

/r/askeconomists Thread Parent