The Myth of Diminishing Returns

Joe Cohen

Industry Expert
Jun 10, 2012
56
40
248
#1
I posted this elsewhere on the forum in response to a particular post, but I thought it should stand in its own thread:

My idea, "The Myth of Diminishing Returns" was arrived at after years of tweaking some "go for broke" systems. Simply stated, it goes like this: Each new bonafide upgrade brings the system to a new level. Once a certain critical mass, particular to each individual system, is reached, successively quantitatively smaller upgrades yield bigger and bigger returns. Of course bigger upgrades yield proportionally larger improvements in sound. Each new upgrade, big or small, has a higher potential than the last due to the increased leverage brought about by the previous upgrade, and so on. The process is endless. As far as I can tell, there is no such thing as a ceiling. Each upgrade in the upper reaches of such an endeavor yields a result which could not have been anticipated and which may be in an entirely new class of experience, but which at the same time is immediately recognized and understood for its rightness. This last so-called "10%" has the potential to yield 1000% improvement and and perhaps much more. This means literally that a tweak that amounts to $10 worth of material can yield an improvement that might be considered a $1000 improvement in a lesser system.

What most people object to about pursuing the last 10% is the cost of end-game components. When you can afford to play in that arena the question becomes not, "Is it worth it?", the question becomes, "Is it better?", but there is still plenty of opportunity to extract the maximum that a given system is capable of with judicious choice of tweaks, accessories and cables.
 

mulveling

Well-Known Member
Jul 7, 2017
132
89
93
#2
I've become increasingly annoyed by the old "diminishing returns" trope, usually thrown out by guys jealous of those with the all-out megabuck systems. I won't be able to get to that level myself, but I do understand that expensive upgrades which don't effect significant gains usually just mean that you haven't upgraded the right thing (i.e. you choose poorly). And I know that the say 1-10K per component level that the "diminishing returns" guys usually play at is often very far from what I would consider diminishing returns.

I think we all have our "suspension of disbelief" lines (of course these lines can and do change), and upgrades which move a system very close to or past that bar will have a great subjective significance even if the absolute improvement is small.
 

Ron Resnick

Site Co-Owner, Administrator
Jan 25, 2015
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Beverly Hills, CA
#3
I posted this elsewhere on the forum in response to a particular post, but I thought it should stand in its own thread:

. . . successively quantitatively smaller upgrades yield bigger and bigger returns.

. . .

Each new upgrade, big or small, has a higher potential than the last due to the increased leverage brought about by the previous upgrade, and so on. The process is endless.

. . .

This last so-called "10%" has the potential to yield 1000% improvement

. . .
This is an interesting theory. But what is the evidence for it?

There are many fields about which I know nothing, but I am not aware of any field -- whether economics or mathematics or physics or biology -- in which the above-stated formulas would hold true.

What am I missing?
 

Ron Resnick

Site Co-Owner, Administrator
Jan 25, 2015
7,996
2,377
680
Beverly Hills, CA
#4
. . . have a great subjective significance even if the absolute improvement is small.
This is, to me, another puzzling formula.

How can a sonic improvement be both "great" and "small" at the same time?
 

DSkip

Industry Expert
Aug 26, 2013
329
58
260
Arlington, TX
www.audiothesis.com
#5
While I agree diminishing returns is a joke of an excuse, I also feel the opposite of the OP. The jumps at the highest level are smaller from a normal ‘perceptible’ level, but make all the difference at that level.

It’s much like baseball to me. 2 mph on your fastball or bat speed at a little league level doesn’t yield much greater results. At the major league level, it’s the difference between a journeyman and a hall of famer who is the face of a franchise. Those smaller differences yield much higher results for those who are at the highest levels. Someone in little league also can’t perceive the difference between a 93 and 95 mph fastball.

A dealer is also like an agent. Some represent the Mike Trouts and Roger Clemens of audio and demand top dollar. Others represent the journeymen and work hard at finding the Craig Counsell’s that offer high performance at affordable prices. There are top prospects that never quite deliver and players waiting to get the proper exposure and opportunity to light up the league. There are players who set the league on fire and then get snuffed almost completely and others who take time to mold into a true, lasting force and leave their legacy behind.
 

Folsom

VIP/Donor
Oct 26, 2015
4,982
825
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Eastern WA
#6
The myth is maybe just as accurately applied to the idea that there are [diminishing] returns possible all the time for a price. The differences are not always quantifiable no matter the means of judgement; except the perception of presumably better can always be true and powerful.

The reality is simple, most choices are for flavor if the gear measures even decently. Some flavors cost extreme amounts of money, and that’s just fine.
 

Folsom

VIP/Donor
Oct 26, 2015
4,982
825
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Eastern WA
#7
P.S. people that only discuss things relative to their wallet are annoying; vehemently trying to push that they believe it's the deceleration they would always come to no matter how much money they had.
 

Skanda

Active Member
May 3, 2020
80
105
33
#8
I've argued in the past that most economic theory is not grounded in experimental science i.e. base axioms are disproven in experimental results.
I found this article to be a refreshing read: https://www.nybooks.com/articles/2019/12/05/against-economics/

As a result, I've been unenthused by arguments about diminishing returns.

"Surely there’s nothing wrong with creating simplified models. Arguably, this is how any science of human affairs has to proceed. But an empirical science then goes on to test those models against what people actually do, and adjust them accordingly. This is precisely what economists did not do. Instead, they discovered that, if one encased those models in mathematical formulae completely impenetrable to the noninitiate, it would be possible to create a universe in which those premises could never be refuted. (“All actors are engaged in the maximization of utility. What is utility? Whatever it is that an actor appears to be maximizing.”) The mathematical equations allowed economists to plausibly claim theirs was the only branch of social theory that had advanced to anything like a predictive science (even if most of their successful predictions were of the behavior of people who had themselves been trained in economic theory)."
 

Mike Lavigne

Member Sponsor & WBF Founding Member
Apr 25, 2010
8,864
2,655
770
#9
i get what i think Joe is saying, but allow me to put my own twist on it.

i think that once you get past a certain room/system performance point (and personal competence point), that various opportunities do open up things up for application of deeper dives. and maybe what i'm saying is that up to a point a system is fighting itself (going uphill), so you are swinging back and forth more than going forward. then you get to the top (of that hill.....not the ultimate mountain) and now various tools applied bring more progress (going downhill)......since the restrictions are removed.

so lots of diminishing returns pushing hard to get clear....then free to go.

i know personally prior to my room tuning efforts in 2015, i had reached a 'doldrum' point and was uncertain as to my next move (a bit of tail chasing) until i broke through that point by grabbing a proper reference vision. i had the tools in place, just needed to see where i needed to go. that's just how it looks now with hindsight. since that point it seems my steps have been more decisive and linear. not much sideway movement. my 20 years prior to that had plenty of zig zags though. if i was smarter maybe it would not have taken 20 years.

others have described not too different experiences.

and getting back to Joe's point; products that from one perspective don't seem to offer much of an ROI since you are not getting the full benefit, might to another person who's system can more fully benefit yield a huge benefit. both views are correct.

obviously as a tweak-king i'm pushing the envelope on power grid, chassis grounding, and resonance control tweaks in the extreme......as well as room acoustics. not all those things pushed me forward until i got over the hump. and along the way were not always easy to rationalize.
 
Last edited:
Likes: Skanda

BlueFox

Member Sponsor
Nov 8, 2013
1,435
151
285
#10
This thread appears to be based on the premise that as you tweak your system the cost of the tweaks gets greater while the improvements are more and more minor. Personally, I haven’t seen that. Required gear seems to cost much more than the tweaks, even though with the tweaks the sound improves to my ears.
 

bonzo75

Member Sponsor
Feb 26, 2014
14,412
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London
#11
Law of diminishing returns is an economic principle, and system budgets usually defy economics, making the law a myth
 

bonzo75

Member Sponsor
Feb 26, 2014
14,412
3,729
740
London
#12
While I agree diminishing returns is a joke of an excuse, I also feel the opposite of the OP. The jumps at the highest level are smaller from a normal ‘perceptible’ level, but make all the difference at that level.

It’s much like baseball to me. 2 mph on your fastball or bat speed at a little league level doesn’t yield much greater results. At the major league level, it’s the difference between a journeyman and a hall of famer who is the face of a franchise. Those smaller differences yield much higher results for those who are at the highest levels. Someone in little league also can’t perceive the difference between a 93 and 95 mph fastball.

A dealer is also like an agent. Some represent the Mike Trouts and Roger Clemens of audio and demand top dollar. Others represent the journeymen and work hard at finding the Craig Counsell’s that offer high performance at affordable prices. There are top prospects that never quite deliver and players waiting to get the proper exposure and opportunity to light up the league. There are players who set the league on fire and then get snuffed almost completely and others who take time to mold into a true, lasting force and leave their legacy behind.
All makes sense until you take up cricket, and baseball seems boring. So sometime your system is going in the wrong direction and better to make a, big shift than increase 2 mph.
 

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