Diminishing Sensitivity implies that when there are two goods (i \& j) and when I expect less of good i, then to give up a set amount of good i, I need to be compensated with less j THAN when I am initially expecting more of good i.

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Diminishing sensitivity implies that as the initial amount of good i decreases, the marginal rate of substitution between goods i and j decreases. This means that to give up a set amount of good i, you need to be compensated with less j when you are initially expecting less of good i.

Diminishing Sensitivity Implies That When There Are Two Goods (I