The Law of Diminishing Returns
Mental Models | concepts
The law of diminishing returns is rooted in the concept that when you invest a finite amount of resources or time into something, there comes a point where the benefits start to plateau or, sometimes, even decline.
Limitations and Misinterpretations
A common misconception about this law is its universality; some mistakenly believe it applies to all situations. One example is in the realm of knowledge acquisition and learning, especially in fields that heavily depend on creativity and innovation.
Application in daily life or management
- Determining the ideal team size for a project: Initially, new team members make a noticeable contribution, but beyond a threshold, their impact diminishes, potentially slowing down the team due to increased overhead.
- Enhancing game graphics: Replacing placeholder art initially has a significant impact, but as refinements continue, the perceived quality improvements decrease.
- Fitness: Increasing workout intensity or duration initially improves strength or endurance, but beyond a point, benefits decrease and may lead to injuries or burnout.
Evaluate [my business decision] using The Law of Diminishing Returns. Examine how adding more of one input, while holding others constant, results in progressively smaller incremental gains. Consider how this principle affects scaling and efficiency.
My dcision is: ## insert your decision here ##