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Each additional unit of input eventually produces less additional output.
Diminishing Returns isn't just theory—it's a practical framework for better decisions. This page explains how it works and how to apply it.
Know when "good enough" is optimal. Don't over-optimize past the point of returns.
Diminishing Returns works by providing a reliable heuristic for a common class of problems. Instead of reinventing decision-making each time, you apply a tested pattern.
The 80th hour of work this week adds less than the 40th hour did.
This model is most useful when you're stuck. If your current approach isn't working, Diminishing Returns often reveals the hidden constraint.
Over-applying: Not every problem benefits from this model. Match the tool to the situation.
Under-applying: People learn the model but don't practice it. Application takes repetition.
Misunderstanding the principle: Surface-level understanding leads to poor execution. Study the examples.
Ignoring context: The same model works differently in different domains. Adapt accordingly.
Identify a current decision you're facing. Write down the assumptions you're making. Challenge each one.
Look at a past failure. Apply Diminishing Returns retroactively—would it have changed the outcome?
Teach the model to someone else. If you can't explain it simply, you don't understand it well enough.
Set a reminder to apply this model once per week for the next month. Track the results.
Diminishing Returns often pairs well with other Productivity models. Combining frameworks multiplies their power.
Mental models require specific cognitive traits to execute. Do you have the Discipline for this?
Each additional unit of input eventually produces less additional output.
Know when "good enough" is optimal. Don't over-optimize past the point of returns.
The 80th hour of work this week adds less than the 40th hour did.
Use Diminishing Returns when facing complex decisions in the productivity domain, when conventional approaches aren't working, or when you need a structured framework for analysis.
Diminishing Returns is used by strategic thinkers, business leaders, and anyone who needs to make high-stakes decisions under uncertainty. It's particularly popular in investing, startups, and engineering.
Yes. Mental models are learnable skills, not innate talents. The key is deliberate practice—actively applying the model to real decisions, not just reading about it.