I remembering that in another discussion where the diminshing return of money was given as an issue with a thought experiment, somebody suggested that you could eliminate the effect by just stipulating that (in the case of a wager) your winnings will be donated to a highly efficient charity that feeds starving children or something.

My own thoughts: If the amount of money involved is so small that it would be worthless to any charity, just multiply everything by a sufficiently large constant. If you run out of starving children, start researching a cure for cancer, and once that's cured you can start in on another disease, etc. Once all problems are solved, we can assume that the standard of living can be improved indefinitely.