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What is the Plateau Effect?

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The plateau effect is a tendency for what works today to be less effective with time. It is a widely observed phenomena that has implications for strategy, quality of life, design and economics. The following are a few hypothetical examples.


A new jogger finds that a 1 mile jog helps them to burn calories to the point that they can eat more cake while maintaining their weight. As the jogger's body adapts to the routine the effect slowly declines.


A farmer finds that a scarecrow keeps crows away. With time, the crows figure it out and begin to return for corn snacks. The farmer moves the scarecrow around and gives it new costumes to reset the process.


An investment bank develops an algorithm that earns superior profits trading a particular class of equities. Within a few weeks, the competition notice the algorithm's behavior and start imitating the strategy. Given the new competition, the performance of the algorithm declines.


A popular mobile device company wows customers with new features with each new release. With time, customers have such high expectations that it is difficult to impress them.
Overview: Plateau Effect
The tendency for a successful strategy to be less effective with time.
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