Revealed Preferences (people are liars)

[Borodog]

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Which of my points was wrong? I'm not interested in semantics, so if you need me to clarify something, just ask. I want to know what of all the empirically proven things that I presented are somehow wrong, and I don't want to hear about how someone uses language differently.

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I never said any of it was wrong you [would be deleted by iron]. Jesus [censored] Christ what thread are you reading???

Edit: Are you drunk or something? Seriously?

[Borodog]

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Borodog,

that was very educational for those like me who mostly lurk in this forum. thanks.

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Thank you. I'm glad someone who read it can read for comprehension.

[xorbie]

I'm halfway through a "cliff notes of thread" post, but I deleted it. It was awesome, but I'm tired of each of us saying that the other isn't interested in debating. I apologize for this line:

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I'm not sure if the two of you have actually begun to believe that the glib, thoughtless responses you guys trot out every time we have this debate actually constitute an argument.


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Hopefully you can take the time to address the rest of my post, maybe present your own thoughts and opinions. I'll be reading that paper... maybe you can drop a line when you're done.

[xorbie]

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I never said any of it was wrong

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Do you or do you not disagree with anything in my post after the first line? I feel we've all gotten worked up over nothing otherwise.

[Copernicus]

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I'm halfway through a "cliff notes of thread" post, but I deleted it. It was awesome, but I'm tired of each of us saying that the other isn't interested in debating. I apologize for this line:

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I'm not sure if the two of you have actually begun to believe that the glib, thoughtless responses you guys trot out every time we have this debate actually constitute an argument.


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Hopefully you can take the time to address the rest of my post, maybe present your own thoughts and opinions. I'll be reading that paper... maybe you can drop a line when you're done.

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The thread is tldr, but if the "paper" isnt Brian Caplans "Why Im Not an Austrian", he specifically addresses the von Mises/Rothbard treatment of preference.

[Phil153]

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Borodog,

that was very educational for those like me who mostly lurk in this forum. thanks.

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Can I ask what was educational about it? All I see is a shifting of words and definitions.

1. Preference: The thing that's determined 100% by an action
2. Purpose: The thing that's determined 100% by an action:
3. Purposeful action: The thing you do that reveals your preference (see #1)

[Borodog]

Here, I've highlighted the ridiculous bull [censored] that has nothing to do with anything that I've ever said in red.

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pvn and borodog,

I'm not sure if the two of you have actually begun to believe that the glib, thoughtless responses you guys trot out every time we have this debate actually constitute an argument.

There are complex issues in economics (particularly the subfield I'm most interested in - behavioral economics) that attempt to detail the various phenomena brought up in this thread. <font color="red">Yet the two of you continue to somehow believe that you are above all this petty academic research, that somehow your overarching dogma takes care of everything.</font> And, before you can object about fallacies of straw men and appeals to authority, I'm gonna tell it like it is.

The fact is, time-dependent preferences are a tricky issue in economics. How should I, as an economist, weigh future utility vs. utility now? How should I, as a human being making choices, weigh future utility vs. utility now? <font color="red">I see no attempt to answer these questions, besides simply "this is how person X does it and this is how person Y does it and we can't argue because how could you know better". Well, I do know better, and I won't accept the argument that I don't simply because it is conceivable that I'm wrong.</font>

There is, of course, the easiest place to start: drug addicts. At one moment, an addict might tell you he has the preference to quit drugs. The next moment he's shooting up heroine. What's the deal? Apparently, the drug addict has a "revealed preference" to do heroine. Or, perhaps, in the former moment the drug addict made a very complex calculus of utility across time and decided to quit drugs, only to have his hunger for drugs . This calculus which our brain has evolved to carry out is something that sets humans apart from other animals, and I don't much care for tossing it aside. That we succumb to weakness at times should not invalidate this special talent, nor does it invalidate the results of this calculus.

More generally, there are actions we take that we regret even when they cause our intended results. What does this say about our preferences?

The limitations on our rationality are well studied. We make bad decisions all the time - and I don't mean decisions that I personally find bad. Study after study shows that I will make a different decision on which gambles to accept simply based on how they are phrased or what context they are given in. The same exact problem is presented to me, with the same exact results, and yet I choose differently. What preference has been revealed here, besides a preference for schizophrenic behavior?

As I stated, time preferences are a sticky issue. How to weigh them is difficult. If I need to do X today to achieve Y tomorrow, is it "bad" to do something that only gives me some limited utility today when the payoff from Y is much larger? Economics isn't necessarily geared to handle these questions, but it does well with money. Even in this narrow, limited domain, we humans have our follies.

Is $5 today really worth $50 tomorrow? I might act like it is, but won't I be rather disappointed tomorrow? Does this disappointment, which we can all agree is rather likely, not matter? What if it is shown that people are actually rather receptive to being forced to save money in the future, knowing that, when the time comes, they might act differently if not locked in? What if it is shown that this is actually a very good way of increasing savings rate, which we can all agree is probably good for people as individuals as well as for the economy as a whole?

<font color="red">When are we going to stop with the gimmicky response of "but the politicians know??" and start actually investigating the issue? Do you want to be right, or to be "right"? Instead of appealing to some vision or ideal of humankind, can we try some study? Some exchange of ideas that might lead to better understanding, rather than pointless arguments over fundamental moral assumptions that actually have little to do with the facts?</font>

This post isn't complete, but here it is. Pick apart at will, but know that I won't be responding just for the sake of responding.

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None of the rest of it, NONE, is in ANY WAY AT ALL, in ANY CONFLICT with ANYTHING I have EVER posted. The fact that you ranted about these things for 8 or 9 paragraphs in a post where you ATTACKED ME, led me to believe that somehow you had got it in your crazy head that something in my beliefs in is conflict with any of this. I explained CAREFULLY why that is NOT THE CASE and that in fact you are using words in a DIFFERENT SENSE than I have in my posting in an attempt to make it seem that I believe things that I do not. Apparently deliberately, since you carried on with it after I carefully explained the problem, so far as I can tell, solely to avoid losing an argument on the internet.

[censored] [censored] [censored] [censored] [censored] you are infuriating.

[Borodog]

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Borodog,

that was very educational for those like me who mostly lurk in this forum. thanks.

[/ QUOTE ]
Can I ask what was educational about it? All I see is a shifting of words and definitions.

1. Preference: The thing that's determined 100% by an action
2. Purpose: The thing that's determined 100% by an action:
3. Purposeful action: The thing you do that reveals your preference (see #1)

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No; Purposeful actions are determined by preferences, which are then demonstrated by those actions. How this difficult to comprehend is difficult to comprehend.

[xorbie]

Are you serious man? Allow me to quote you, from this very thread:

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But of course magical angelic omnipresent, omniscient, omnibenevolent bureaucrats and politicians suffer none of these failings.

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Gimmicky, sarcastic quick about politicians. Yes, we have actually seen this post already in 95% of AC related thread, but please by all means, post it again...

The rest, well you can say that I've determined that your posts in other threads have "revealed preferences"... [img]/images/graemlins/wink.gif[/img]

But seriously, do you want to continue to quote that post and not address any of the (IMO) interesting and on topic parts? I at least try to sprinkle in a little factoid here or there along with my baseless attacks...

Although, while I'm at it, you highlighted the following:

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I see no attempt to answer these questions, besides simply "this is how person X does it and this is how person Y does it and we can't argue because how could you know better". Well, I do know better, and I won't accept the argument that I don't simply because it is conceivable that I'm wrong.

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Does this really not conflict with anything you, or perhaps pvn, has posted in the past? Because I'm fairly sure that in the trans fat thread, the crux of the argument against laws such as "No trans fat" is that I can't possibly know that someone would prefer not to eat trans fat. If I got the mistaken impression, please feel free to correct me, as it seems relevant to this thread.

edit: Perhaps instead of "crux" I should say it was an important prong.

[Zeno]

Praxeology from Wiki Praxeology

Here is the article so all can see the explanation: [If any of the AC proponents think the article is incorrect in any way then please note the mistakes or ambiquities etc]


Praxeology is the science of human action. The term was first coined in 1890 by Alfred Espinas in the Revue Philosophique, but the most common use of the term is in connection with the work of Ludwig von Mises and the Austrian School of economics.

Explanation

Mises attempted to find the conceptual root of economics. Like other Austrian and classical economists, he rejected the use of observation, saying that human actors are too complex to be reduced to their component parts and too self-conscious not to have their behaviour affected by the very act of observation. Observation of human action, or extrapolation from historical data, would thus always be contaminated by overlooked factors in the way that the natural sciences would not be (although in quantum mechanics observation of one property of a system causes uncontrollable changes in other properties).

To counter the subjective nature of the results of historical and statistical analysis (see Methodenstreit), Mises looked at the logical structure of human action (he entitled his magnum opus Human Action). In other works he built on the methodological aspect of Economics, on a PostKantian base, the synthetic a priori.

From praxeology Mises derived the idea that every conscious action is intended to improve a person's satisfaction. He noted that praxeology is not concerned with the individual's definition of end satisfaction, just the way he sought that satisfaction and that individuals will increase their satisfaction by removing sources of dissatisfaction or "uneasiness".

An acting man is defined as one capable of logical thought — to be otherwise would be to make one a mere creature who simply reacts to stimuli by instinct. Similarly an acting man must have a source of dissatisfaction which he believes capable of removing, otherwise he cannot act.

Another conclusion that Mises reached was that decisions are made on an ordinal basis. That is, it is impossible to carry out more than one action at once, the conscious mind being only capable of one decision at a time — even if those decisions can be made in rapid order. Thus man will act to remove the most pressing source of dissatisfaction first and then move to the next most pressing source of dissatisfaction. Additionally, Mises dismissed the notion that subjective values could be calculated mathematically; man can not treat his values with cardinal numbers, e.g., "I prefer owning a television 2.5 times as much as owning a DVD player."

As a person satisfies his first most important goal and after that his second most important goal then his second most important goal is always less important than his first most important goal. Thus, the satisfaction, or utility, that he derives from every further goal attained is less than that from the preceding goal.

In human society many actions will be trading activities where one person regards a possession of another person as more desirable than one of his own possessions, and the other person has a similar higher regard for his colleague's possession than he does for his own. This assertion modifies the classical economic view about exchange, which posits that individuals exchange goods and serves that they both appraise as being equal in value. This subject of praxeology is known as catallactics.

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Added in edit. Forget the last part of the article:

Categories

The categories of praxeology, the general, formal theory of human action, as outlined by Murray Rothbard (pp. 945-946) are as follows:[1]

A. The Theory of the Isolated Individual (Crusoe Economics)
B. The Theory of Voluntary Interpersonal Exchange (Catallactics, or the Economics of the Market)
1. Barter
2. With Medium of Exchange
a. On the Unhampered Market
b. Effects of Violent Intervention with the Market
c. Effects of Violent Abolition of the Market (Socialism)

C. The Theory of War--Hostile Action
D. The Theory of Games (e.g., Von Neumann and Morgenstern)
E. Unknown

^