Thinking on the Margin

Decision tactics
to Beat Back Black and White Thinking and decision anxiety
so you can move forward

 

by Madelyn Griffith-Haynie, CTP, CMC, ACT, MCC, SCAC
Another of The Black & White topic articles
from the Challenges Inventory™ Series

Balancing our Books by Thinking on the Margin

Found HERE

Most frequently associated with economic theory, “thinking on the margin” is also a handy concept that can help break the back of black and white thinking for those of us with Executive Functioning Disorders.

It’s an interesting theory of how we make decisions that relates to increasing personal productivity, avoiding an increase of the time we spend on task. It is worth taking the time to understand.

So let’s check it out!

Costs and benefits

Most of us have probably been exposed to the concept of performing a cost/benefit analyses to help us determine whether something is worth doing.

That technique can be simply described as one where we tally up the costs and downsides to an endeavor and compare them to a tally of the benefits and upsides that might be derived if we went forward with something we have been considering.

That’s not exactly what “thinking on the margin” advocates.  Once some basic data has been gathered, this second concept asks us to compare the cost and benefit of any additional action.

It means to think about your next step forward, not ALL possible steps forward.

Lemonade Economics:

Found HERE

Let’s pretend you are an unusually economically savvy kid operating a lemonade stand at the end of an especially HOT summer day.

You’ve done the math and determined that, based on the traffic in your neighborhood and how many cups you expect to sell, you need to get no less than 25 cents each to cover the cost of cups, ice, lemons and sugar – and pay yourself enough for your time to make it worth doing at all.

So you make your sign:
Ice Cold Home Made Delicious Lemonade,
only a quarter a cup!

But once you’ve recouped your costs, the equation changes.  Everything from that point on is profit, right?  So when you are offered a measly dime from the kid next door, you have a different decision to make.

• Based on the traffic today, how much longer are you likely to have to tend your stand to sell the rest of your lemonade at full price?
• How much longer before your ice melts?
• How eager are you to sell it all and get into the air conditioning?
• Even, how much do you like the neighbor-kid with the dime?

The optimum benefit for you would be where the marginal benefit (what you receive as a result of your decision) equals the marginal cost — which, in this case, is settling for less than what you’d hoped you would receive for every cup of lemonade.

Were you this young entrepreneur, economists who advocate “thinking on the margin” would advise you to accept less than 25 cents a cup exactly when the marginal benefit of selling an additional cup of lemonade at your original cost equaled the point where staying out in the sun much longer was no longer worth it to you — regardless of what the average benefit from your work had been to that point.

They say that, to work smart, we always need to work at the margin.
I say, it’s a good concept to keep in mind for some decisions.

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Marginal Thinking and Personal Productivity

Most of us who are big on getting things done already think on the margin, even if we don’t consciously consider our decisions in those terms.

• When we are least productive, we spend our time on those items that don’t really yield a great deal of forward movement in our lives: like playing Words with Friends™, or browsing the internet for pins with productivity tips — or even frittering away the day handling those bazillion “minute” tasks many productivity gurus counsel us to handle immediately.
• When we are most productive, we ask ourselves, even unconsciously, “What can I do that will produce the highest Return on Investment [ROI] for my time right this very minute?”

Said another way, thinking on the margin where our personal productivity is concerned helps us decide when to STOP one endeavor to move on to something else.

Consciously changing our way of thinking about how we determine what we do with our resources to include the economic concept of thinking on the margin can help us be more efficient or intentional about our decision-making.

But there is another concept it would be good to factor in as well.

Opportunity Cost

What else could you be doing with your resources – time or money, for example? In other words, what would you be giving up to continue on your current path?  While that might sound like the same thing, it’s more like looking at decision-making from two different viewpoints.

• Marginal cost refers to what you’d have to consider in order to sell or produce one more item.

It’s easier to understand when you are dealing with when to stop producing another unit of product, but in productivity terms that might mean, for example, giving up the additional time to make sure that today’s blog post is error-free before you hit publish.

When you’re hungry or sleepy it might be well worth it to you to pack it in without a final pass. You might well change a few more things were you to keep on keepin’ on, but perfection is no longer worth it to you at that point.

Related Post: Getting to Good ENOUGH!

Found HERE

• Opportunity cost is considering that time spent from, effectively, the other end of the telescope — looking specifically at what you’d have to give up, were you to spend that additional time making sure everything is the very best it could be.

How perfect does it really need to be,
compared to what it would “cost” you to make it so?

After all, you can’t spend your time on something else while you are still working on making today’s blog post just so, any more than you can spend money on one thing and have it available to buy something else.

* Does spending additional time mean you won’t have the time to fix the dinner you’d planned, so your family will have to eat take-out one more night?
* Does it mean you will be late for something else you’d looked forward to doing – or that, perhaps, it wouldn’t be worth attending at all if you couldn’t be on time for, say, a theatre curtain?
* Will you be unable to get in bed in time to get enough sleep to be really sharp for that early meeting for your important client presentation tomorrow?

Those are all examples of the opportunity cost of working for additional time perfecting that blog post. It’s another way of deciding to let good enough be good ENOUGH.

Related Post: The Virtues of Lowering your Standards

On the margin decisions

Found HERE

A decision at the margin is not deciding whether to go to a restaurant to celebrate your father’s birthday, or whether to have a party at your home or your sister’s.

It’s more like deciding whether to have another drink (or dessert) after the birthday meal is concluded, regardless of environment.

Once dinner is over, you need to factor in a number of things, most of which you couldn’t possibly have known ahead of time: how much you ate for dinner and whether you have “room” for dessert without making yourself uncomfortable, for example.

Or whether there is somebody else willing to drive you home if you have that additional drink — or even how far you have to drive, how busy the route, and the likelihood of getting into a fender-bender before you are safely home.

Somewhere there is a point where the cost and benefit are equal,
and that is exactly the “margin” that economists encourage you to consider.

This theory of economics suggests that the most effective manner of thinking at the margin would be to decide whether to proceed with an action at the tipping point where the marginal benefit begins to outweigh the marginal cost (or vice versa).

Beyond an initial cost-benefit analysis, it requires a more nuanced system of decision-making that is actually less detailed.  Every time circumstances change, a limited set of opportunities and challenges arise that you couldn’t have factored in to begin with.

Now let’s look at the opportunity costs of this example:

Phillip Martin, artist/educator

Did your partner bake a special birthday cake you won’t be able to enjoy once you return home if you eat another bite before leaving the party?

Will you have to diet for several days to “pay” for the additional calories consumed by selecting something from that luscious-looking dessert-cart?

If you are the one paying for the meal and call for a round of after-dinner drinks what else will you be unable to purchase unless you work some overtime?  What else would you have to forgo to have the time to work the additional hours?

Why care about this at all?

Life is about more than productivity, of course – there are things that are just as important as getting things done, and some that are even more important.  We each deserve down time – and we are entitled to spend some of it goofing off.

We are ALL more than our to-do lists.

However, making these frequently unconscious ways of deciding conscious not only helps us make better decisions in the moment, it helps us avoid agonizing in indecision every time we need to make one — without falling prey or giving in to impulsivity.

Conscious consideration offers us something to keep our brain’s juices flowing, often helping us to skate past the brain-lock that sometimes rides along with those pesky prefrontal cortex-intensive decisions.  And life gets easier!

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You might also be interested in some of the following articles
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Related articles here on ADDandSoMuchMore.com

• Nine Challenges to Effective Functioning
• Naming the Game
• Moving from Black and White to Grey
• Trouble with Transitions

Articles in Related Series

Linklists: Easy for me to keep updated for access from ALL related articles
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• The Black and White Thinking LinkList – links to ALL
• The Creating and Maintaining Habits Linklist

Related ’round the ‘net

• All or Nothing Thinking (read the comments too!)
• Margins and Thinking at the Margin (econlib.org)
• No Free Lunch: Why Understanding ‘Opportunity Cost’ Matters
• Getting in the Money Mindset: A Basic Financial Plan for New Authors
• Thinking on the Margin

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