Why the 5th Slice of Pizza Matters

The first bite is heaven. By slice five, regret.

3 min readInteractiveQuick check inside

The big idea

Each extra unit of something gives you less satisfaction than the last. That one fact explains a huge amount of how people spend money.

Economists call satisfaction utility. The extra satisfaction from one more of something is marginal utility, and it almost always shrinks. LeBron James is thrilled by his first new pair of sneakers. By the tenth pair the thrill is gone, and more just means clutter. That’s the law of diminishing marginal utility.

This is one reason the demand curve slopes down. If the fifth slice of pizza only gives you a little joy, you’ll only buy it if it’s cheap. Lower prices make up for lower marginal utility. Try it below: set a price per slice and see how many you’d actually buy.

There are fun exceptions. Wallpapering half a room is frustrating, and finishing it is satisfying. Learning guitar is painful before it’s fun. But as a rule, more of the same thing brings less extra joy.

How many slices would you buy?

Try it
Worth to you$6.00🍕#1$4.50🍕#2$3.00🍕#3$2.00🍕#4$1.00🍕#5$0.25🍕#6

Spot it in the wild

All-you-can-eat buffetsThey work because your marginal utility drops fast. The restaurant knows plate four is much smaller than plate one.
Bulk deals“Buy one, get the second half off” exists because the second one is worth less to you.
StreamingThe fifth subscription adds less than the first. That’s why people cancel the extras first.

Quick check

Tap an answer.

Why will most people only buy a 5th slice of pizza if it’s cheaper?

Diminishing marginal utility. The 5th slice is worth less to you, so you’ll only pay a lower price for it.

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