As the magnitude of the gain increases, the amount of additional satisfaction people get out of each additional unit decreases. The shape of this curve conforms to what economists have long talked about as the "law of diminishing marginal utility." As the rich get richer, each additional unit of wealth satisfies them less.
The concept of diminishing marginal utility suggests that as individuals acquire more of a good or resource, the satisfaction gained from each additional unit diminishes. This principle applies to wealth: as individuals become wealthier, the pleasure or satisfaction derived from each further increase in wealth reduces significantly. Essentially, the more one has, the less joy each additional gain brings.
In his book "The Paradox of Choice: Why More Is Less," Barry Schwartz emphasizes that this phenomenon is particularly pronounced among affluent individuals. Their increasing wealth translates into decreasing levels of satisfaction from that wealth, highlighting the psychological limits of material possessions. This understanding points to a paradox where more options or greater wealth may not necessarily lead to greater happiness.
