Marginal Utility


Marginal utility is a basic staple of undergrad economics courses. Typically the value of a good goes down as you consume more of it. As I discovered this afternoon, I get less enjoyment from my third cinnamon roll than I did from my first (note to self: try some self-control). But sometimes when goods get infinitely cheap the consumption curve goes completely awry. In his blog deal architect, Vinnie Mirchandani writes about what happens when people start getting unlimited cell phone minutes for a fixed price:

In the UK when they had a similar unlimited mobile minutes promotion a few years ago, a man told me he used his and his wife’s cell phones as a baby monitor – all night and every time the baby had a nap.

Awesome. A million dollar solution to a $50 dollar problem.

The inspiration for the post was that most of the major US mobile phone carriers have just introduced plans that give you unlimited calling for $99 monthly. Have you thought about uncapping usage of your product?

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