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Old 04-21-2007, 06:38 PM
xorbie xorbie is offline
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Default The Axiom of Choice

Interesting talk by Barry Schwartz.

I don't want to say much because it would be better to just go into without any preconcpetions, but I think this adresses some very fundamental issues with regards to capitalism.
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Old 04-21-2007, 06:43 PM
Nielsio Nielsio is offline
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Default Re: The Axiom of Choice

cliff notes
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Old 04-21-2007, 06:47 PM
xorbie xorbie is offline
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Default Re: The Axiom of Choice

Will give perhaps tomorrow, just want to have some people see it first.

edit: Mods have informed me I need more. The talk discusses the notion that more choice --> more freedom --> more welfare.
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Old 04-21-2007, 07:17 PM
goodsamaritan goodsamaritan is offline
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Default Re: The Axiom of Choice

Cliff Notes (Speaker's ideas and conclusions, not mine):

We live in a world with a lot of choices. There are good and bad consequences to this. The bad consequences are:
1. Choice paralysis: So many choices that you are unable to decide and end up doing nothing. Anectodote: When people must choose between 50 pension plans instead of 5 plans, their participation rate drops even though it is clearly within their interest to participate.
2. Opportunity cost: Even when you are doing something good, you are thinking about what else you could be doing. Anectdote: New York city couple sitting on the beach thinking about how they are missing out on a good parking space in front of their building.
3. Increased expectations --> lower satisfaction. If you get anything less than perfection nowadays, you are pissed. Int he past you had low expectations and were more easily satisified.

Conclusion: Rich people have too many choices and are worse off as a result. Poor people have too few choices. If the rich people shift their choices to the poor people, both parties would be better off.
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Old 04-21-2007, 07:27 PM
hmkpoker hmkpoker is offline
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Default Re: The Axiom of Choice

I covered this and a similar lecture here.

While what he is saying is very relevent on a psychological level, he completely ignores the economic ramifications of artificially restricted choice. In fact, he opens up the speech by openly ignoring the benefits. "We all know what's good about it, so let's focus on what's bad." This is like lecturing the pros and cons of Wal Mart without talking about the increased convenience and savings to consumers, and just talking about how moms and pops are going out of business. While there are some psychic detriments, the economic benefits provide for so much that we can make them up very easily, and that is how the civilized world progressed. Are we better off living in the dark ages when there were extremely few choices? Pretty hard to obsess over what "could have been" in that case. He is literally advocating shutting down civilization.

While I am very sympathetic to psychological findings, even as they often deviate from the very narrow-minded Austrian assumptions, I think that what Barry Schartz is saying is complete nonsense. If you're miserable because you're not sure whether you made the right purchase or not, you need a more positive outlook on life. I've never felt this way about the car I bought, the apartment I have or the computer I customized. Instead of lowering your expectations (come on, THAT'S the secret to happiness?!?!?!?!), just spend some time appreciating what you have rather than obsessing on what you don't have and this ceases to be a problem. Anyone can do this. We don't need to rewrite the economy because people don't know how to be happy.

Happiness is not an economic issue. It is a personal issue.
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Old 04-21-2007, 07:31 PM
xorbie xorbie is offline
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Default Re: The Axiom of Choice

[ QUOTE ]

While what he is saying is very relevent on a psychological level, he completely ignores the economic ramifications of artificially restricted choice. In fact, he opens up the speech by openly ignoring the benefits. "We all know what's good about it, so let's focus on what's bad." This is like lecturing the pros and cons of Wal Mart without talking about the increased convenience and savings to consumers, and just talking about how moms and pops are going out of business. While there are some psychic detriments, the economic benefits provide for so much that we can make them up very easily, and that is how the civilized world progressed. Are we better off living in the dark ages when there were extremely few choices? Pretty hard to obsess over what "could have been" in that case. He is literally advocating shutting down civilization.

[/ QUOTE ]

I'm not sure what you mean by "economic ramifications" and why they matter. The whole point of studying economics is to try to increase human welfare, and I think he's just pointing out a counterintuitive finding. He quite clearly states that some choice is better than no choice.

[ QUOTE ]

Happiness is not an economic issue. It is a personal issue.

[/ QUOTE ]

Happiness is actually quite literally the central economic issue.
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Old 04-21-2007, 07:32 PM
jman220 jman220 is offline
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Default Re: The Axiom of Choice

[ QUOTE ]
Happiness is actually quite literally the central economic issue.

[/ QUOTE ]

This is true, see, for example, "utility." Its what drives all economic exchanges.
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Old 04-21-2007, 07:33 PM
Nielsio Nielsio is offline
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Default Re: The Axiom of Choice

Is the speaker talking about a business opportunity?
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Old 04-21-2007, 07:49 PM
hmkpoker hmkpoker is offline
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Default Re: The Axiom of Choice

[ QUOTE ]
[ QUOTE ]
Happiness is actually quite literally the central economic issue.

[/ QUOTE ]

This is true, see, for example, "utility." Its what drives all economic exchanges.

[/ QUOTE ]

But utility and happiness are not the same thing. Happiness is a cardinal and measurable emotional state of being. Utility, on the other hand, is an ordinal measure of worth that an individual assigns to a good or service. The most preferable choices do not necessarily cause happiness. In fact, they frequently don't.

Economics is about the production, distribution and consumption of scarce resource value. Value is known only through preference; not happiness. Nor is happiness a particularly scarce resource! Read Man's Search for Meaning by Viktor Frankl if you don't believe me. Happiness is cultivated by developing an appreciative, thankful and positive outlook on life, not by owning more goodies. (Yes, people who own more goodies are more likely to be happy, but if you look at the differences in cardinal happiness by economic bracket, the intra-bracket variances of happiness FAR surpass the inter-bracket variances.)

Happiness is also not the most important thing in everyone's life. If it were, all people would always prioritize it over everything else, but they don't. Our human drives lead us in many different directions, and who are we to tell people what the meaning of their lives should be?
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Old 04-21-2007, 09:04 PM
pvn pvn is offline
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Default Re: The Axiom of Choice

[ QUOTE ]
Economics is about the production, distribution and consumption of scarce resource value. Value is known only through preference; not happiness. Nor is happiness a particularly scarce resource!

[/ QUOTE ]

POTD/W/M
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