The market or subjective theory of value is the further development of an earlier theory of marginal utility. 

Several studies have examined the concept of marginal utility, and have determined that persons tend to value everything comparatively and not absolutely.

For example, a person seeing a display of a dozen hats, all equal in price and appearance, might purchase one.

If a second hat were offered at a slightly lower price, this same individual might buy that one also.  However, he probably would not value any more hats at all unless he recieved additional discounts.

After our hypothetical hat buyer had acquired a half-dozen hats, the likelihood is that he would refuse to value any more hats even with discounts, and hence would stop buying hats at any price, especially after contemplating the diminishing supply of cash in his wallet, and realizing that he was beginning to feel quite hungry after a morning of shopping and haggling.

The Austrian economist Karl Menger is frequently credited with developing the marginal utility theory, and it has formed a fundamental basis for the so-called Austrian school of economics.

Beginning in the mid-nineteenth centurey, the idea that subjective value is derived from an individual's perception of marginal utility has provided the most compelling argument and demonstration repudiating the labor theory of value as promoted by such individuals as Karl Marx.