2min chapter

The Decision Corner cover image

The Voltage Effect with John List

The Decision Corner

CHAPTER

Thinking on the Margin

In many cases, there might be a very large diminishing return on some of our investments. In that case, then it behooves you to do something which i call thinking on the margin. The example is just crystal clear with facebook and google. When i looked at our data the first time it left, what i saw was that we were spending three times more on facebook ads to get the last driver to come in than we were spending on google ads. And there's a rule in economics that says, on the margin, the last dollar you spend on every input should lead to the same level of output. That's called optimization on themargin.

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