The Law of Accelerating Returns

Neither example provided in the article are correct in the context of marginal returns.. 

The first because the improvement is as a result of getting a dysfunctional system functional.  "unlocks the previously unrealized potential of your other components" 

Like replacing an incorrect rectifier tube or other similar build feature with the correct one.  Fixing a flat tyre on a car.  Everything will work better and as it was designed to.  This is shifting the returns curve upwards, not a movement on it.

The second is changing the technology which adds a characteristic that wasn't there previously.  Comparing two exact same cars but for the fact that one has a manual transmission and the other automatic.

Anyway, this is actually conceded - "Far from offering only incremental improvement"- but marginal analysis is only about increments.  So, does not apply by the author's own admission..

I think its probably not a good idea to use the marginal return concept to audio equipment.  It has a very narrow meaning, one that is exceptionally useful and informative in the correct context.

I didn't read it all, they lost me early. I think system synergy is and has always been the key. High dollar systems can sound amazing or they can sound like crap. Money has little to do with it other than the cost of top shelf loudspeakers requires a minimum buy in. 

@noske,

I loved that. It was so Leonard Nimoy!

Spock himself couldn't have refuted it more clearly.

@russ69,

That's been my experience too.

Hi-Fi must be a very tough game to get into. Sometimes at shows you see folks who've poured everything into their design and it simply does not sound that good for the money being asked.

They're probably nice people, and they've probably worked very hard getting to this point, and you don't want to trample over anyone's dreams, but it's hard to offer any advice when so many other products offer similar or better performance at a much lower price.

I don't think this is a business for anyone with a thin skin. It must be more than a little disturbing when you think you've developed a world class product yet no one wants to sit down and listen for long.

@noske +2

 And yet to someone trying to assemble the best-sounding audio system for a given budget, The Law of Diminishing Returns can also be a fallacy. In fact, one could make the case that an audio system follows what I’ll call The Law of Accelerating Returns—that the additional money spent provides a disproportionate amount of the system’s overall performance.