Following earlier work by Paul Cantor and Stephen Cox on the cultural implications of economic ideas (Literature and the Economics of Liberty, 2009), this essay develops a new theory of comedy, supported by the economic principle of marginal utility. A review of previous theories—the Sudden Glory Theory of Thomas Hobbes (1651), the Seriousness Theory of Elder Olson (1968, intended to supplant all earlier theories), and the ubiquitous Incongruity Theory—demonstrates that they explain only a restricted band of comic effects. The principle of marginal utility, which incorporates the idea of individual and subjective valuation, helps to elaborate a more inclusive theory of how, when, and why the comic response occurs. The essay tests its explanations against a wide range of comic effects, including “dark humor,” self-directed humor, laughter in the face of death, and other phenomena that have not been at home in earlier theories.