Once more into the flaws with introductory economics

[moorobot]

Here is an article that contrast actual human behavior to the assumptions about people for use in econ 101 deductions:

The Marketplace of Perceptions

Here are some excerpts:

[ QUOTE ]
Such perverse facts are a direct affront to the standard model of the human actor—Economic Man—that classical and neoclassical economics have used as a foundation for decades, if not centuries. Economic Man makes logical, rational, self-interested decisions that weigh costs against benefits and maximize value and profit to himself. Economic Man is an intelligent, analytic, selfish creature who has perfect self-regulation in pursuit of his future goals and is unswayed by bodily states and feelings. And Economic Man is a marvelously convenient pawn for building academic theories. But Economic Man has one fatal flaw: he does not exist .

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[ QUOTE ]
“Then, the model of the market is not simply buyers and sellers coming together for mutually beneficial exchange,” Wanner continues. “Instead, the exchange between buyers and sellers has aspects of a zero-sum game. The seller can do even better if he sells you something you don’t need, or gets you to buy more than you need, and pay a higher price for it.” The classical welfare theorem of Vilfredo Pareto was that markets will make everyone as well off as they can be, that the market distribution will be an efficient distribution that maximizes welfare. “But once you introduce framing, all bets are off,” Wanner says. A zero-sum game between buyer and seller clearly does not maximize everyone’s welfare, and hence suggests a different model of the marketplace.

[/ QUOTE ]

[hmkpoker]

[ QUOTE ]
Such perverse facts are a direct affront to the standard model of the human actor—Economic Man—that classical and neoclassical economics have used as a foundation for decades, if not centuries. Economic Man makes logical, rational, self-interested decisions that weigh costs against benefits and maximize value and profit to himself. Economic Man is an intelligent, analytic, selfish creature who has perfect self-regulation in pursuit of his future goals and is unswayed by bodily states and feelings. And Economic Man is a marvelously convenient pawn for building academic theories.

[/ QUOTE ]

Not a single mention of time preference. Excepting the dimension of time, of course he doesn't exist.

[moorobot]

Notice that many if not all of the examples in the article cannot be saved by time preference.

[Al68]

[ QUOTE ]
[ QUOTE ]
Such perverse facts are a direct affront to the standard model of the human actor—Economic Man—that classical and neoclassical economics have used as a foundation for decades, if not centuries. Economic Man makes logical, rational, self-interested decisions that weigh costs against benefits and maximize value and profit to himself. Economic Man is an intelligent, analytic, selfish creature who has perfect self-regulation in pursuit of his future goals and is unswayed by bodily states and feelings. And Economic Man is a marvelously convenient pawn for building academic theories.

[/ QUOTE ]

Not a single mention of time preference. Excepting the dimension of time, of course he doesn't exist.

[/ QUOTE ]

Of course not. But the standard reference man used in biology doesn't exist either. That doesn't invalidate biology at all.

It is still useful to consider a standard "Economic Man", even if he doesn't really exist. And classical economists never thought that "Economic Man" was a real person.

Just a reference to use for modeling purposes.

[Economic Man]

[ QUOTE ]
But Economic Man has one fatal flaw: he does not exist .

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How rude! You don't exist!

[pvn]

[ QUOTE ]
[ QUOTE ]
But Economic Man has one fatal flaw: he does not exist .

[/ QUOTE ]

How rude! You don't exist!

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This gimmick account belongs to which mod?

[RonMexico]

Econ 101 is not real econ. Surely this has been brought up many times before?

[natedogg]

[ QUOTE ]
The seller can do even better if he sells you something you don’t need, or gets you to buy more than you need, and pay a higher price for it.”

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Thank you oh wise philosopher for determining what I need or don't need.

natedogg

[moorobot]

But Biology isn't trying to derive how human interactions are going to occur/are occuring from that reference, nor are they giving out policy suggestions based upon it, for one thing.

For another, the overly simplisitc economics man postulate has been a siren song, leading us away from coming up with something better for modeling.

[moorobot]

It may have been better if he worded that "if he sells you something that you don't benefit from having, or gets you to buy more than you will benefit from".