A fun question from a student:
Does the law of diminishing marginal utility mean that we should eat dessert before our veggies at dinner?
The law of diminishing marginal utility explains ex post why we made decisions. So if you ate your dessert before the veggies it would tell me that you got more pleasure from the dessert. So your question should be asked in the context of, are we being rational when we do, in fact, eat the veggies first? It would seem at first not to be rational. After all, why would you do something that is more costly first? It would be crazy.
So, why do we do it? Well, it must be the case that the net pleasure we get from the veggies exceeds the net pleasure we get from the dessert … perhaps? Or more to how I think about it, we get pleasure from savoring the idea of eating dessert last, which should be counted as a “pleasure” in eating veggies first. A challenge to an economics or psychology student is to come with an experiment that can test this idea.
Evolutionary biology could probably square this idea – we may have reproductive advantages bestowed on ourselves when we are healthier, so we are wired to know that eating the veggies first is a good idea, and this would also prevent us from filling up on the sweets before we had our fill of properly nutritious food.
Or perhaps the way to think about the issue is this, why would we ever hold off on consuming pleasurable things? I would argue that it is not irrational to have neutral or even negative time preferences. One might answer that not eating the cheesecake now is just like investing money today to be consumed later. But that can’t be right, because that investing action tells you that you expect to get more pleasure from consuming tomorrow, and there is an explicit tradeoff between today and tomorrow. In the veggies / cheesecake scenario, you made the choice to purchase both veggies and cheesecake. You COULD have purchased two cheesecakes. So why didn’t you? Diminishing marginal utility I would argue. Ignoring costs, you would maximize your happiness by equating your marginal satisfaction of your last bite of each food item. So it must be the case that the marginal value of the veggies exceeds the marginal value of a second cheesecake.
But that does not tell us why we don’t eat cheesecake first, THEN veggies. It only tells me that I like variety. And just saying that “I do it because Mom told me so,” is not a good answer. Mom also told you not to have sex until you were married, and she always asked you to clean your room.
Maybe it depends on what the action is that we care about. Are we just eating? Are we trying to get calories? Are we trying to get nutrition? Are we simply seeking sensual pleasure? Are we trying to fill our tummies? If we weigh up all the reasons we are eating, it has to be the case that we best satisfy that objective by eating the veggies first, and saving a little room for some cheesecake. So in addition to this behavior revealing our true values for veggies and cheesecake, it also yields some insights into why it is that we sit down and eat in the first place. Perhaps that answer is a little unsatisfying … sort of like eating the Sprouts without the cheesecake to finish. I’ll add the cheesecake in the spring.