Sweet (43/365)

by Lee Santiva February. 12, 2019 256 views

Small pieces of candy are not just attractive to small children with their small fingers, but also to adults, but for a very different reason.

Many years ago in the break room of a small company, a line started to form for the only vending machine. My friend and colleague stood at the front, undecided, holding up at least five people. “Hey Liz, is the machine broken or what?” the guy at the back yelled, the line was reaching out into the hallway.

Liz calmly replied “the M&Ms are all gone”. “Who cares, just get a Snickers!” said somebody else. “Come on Liz, chose something, we’re all waiting”.

She didn’t. She turned and left the machine empty-handed. I asked her why. She replied “I wanted discrete units.” It was 1988 and Liz was on to something.

Color composition with Smarties

Color composition with Smarties

Shortly thereafter in the 90's smaller “snack” size and “mini” portions were first introduced into the American market. Over the next twenty years the trend expanded from sweets to pizza to cheese. Last year, 92% of all adult Americans had snacked in the past 24 hours. The long-term success of such a consumption pattern can be explained with economic theory.

As adults we want to – in economic terms – maximize our utility. Utility is the economist’s way to measure pleasure or happiness. Marginal utility is the incremental utility received from one additional unit of consumption. What my friend Liz referred to as "discrete units".

Economists like Liz and myself measure utility in units – we ask how much would a one unit change in a variable impact our utility, i.e. our happiness.

Smarties are discrete units

Smarties are discrete units

In theory, with smaller "discrete units", you can achieve your optimal level of satisfaction more precisely. In reality, anyone who has over-indulged and ate “the whole thing” has discovered how suddenly marginal utility turns into negative utility. That last incremental unit suddenly plummeted you into misery giving you a stomach ache.

The last sweet piece can turn the entire experience sour and you lose all the incremental happiness gains you had had just minutes before.

Next time you buy M&Ms or Smarties or whatever the small little pieces of sweetness are called in your country, think about Liz's discrete unit theory and try not to eat all of them at once, if you want to maximize your happiness.

*Reference: Small is the new Big…. packaging strategies as quoted in this article: https://vikingmasek.com/packaging-machine-resources/packaging-machine-blog/how-snackification-is-shrinking-food-packaging

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Kevin Wenning 11 months, 1 week ago

Don't ask the customer what they want. By the time you create it they will have changed their mind. Just tell them what they want. I believe that's how mr Steve Jobs put it.

11 months, 1 week ago Edited
Lee Santiva Replied to Kevin Wenning 11 months, 1 week ago

So true! The smartphone has transformed peoples lives in so many ways. No one would have ever imagined such a thing to "ask for it"

11 months, 1 week ago Edited
Björn Roose 11 months, 1 week ago

Nice photos. Being an economist myself, I can confirm you explained the marginal utility theory correctly. As a human being alas I have to confirm that it's not easy to decide when the marginal utility will turn negative smile

11 months, 1 week ago Edited
Lee Santiva Replied to Björn Roose 11 months, 1 week ago

Thanks a lot! And you‘re an economist, too? That‘s quite a coincidence.

11 months, 1 week ago Edited
Björn Roose Replied to Lee Santiva 11 months, 1 week ago

Nah, the world is full of economists. I think the marginal utility of every extra one is pretty minimal joy

11 months, 1 week ago Edited
Lee Santiva Replied to Björn Roose 11 months, 1 week ago

+1

11 months, 1 week ago Edited
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