What Would You Pay to Make Your Essays This Illogical?
There is a fair amount of nonsense in this Alex Renton essay, but this is the worst bit:
"But his findings appeared to say elemental things about the human condition – not least that people are more motivated by fear of financial loss than by the possibility of financial gain, to the extent that they will behave highly illogically. Most of us, for example, would rather forgo a pay rise if our colleagues are going to get more than us."
And so if we actually care more about our relative pay than our absolute pay, and we act on that preference... this is illogical how?
"But his findings appeared to say elemental things about the human condition – not least that people are more motivated by fear of financial loss than by the possibility of financial gain, to the extent that they will behave highly illogically. Most of us, for example, would rather forgo a pay rise if our colleagues are going to get more than us."
And so if we actually care more about our relative pay than our absolute pay, and we act on that preference... this is illogical how?
Obviously, Mathieu Ricard would choose an extra $10 a month over nothing even if it meant that the Dalai Lama got a $20 raise. Emotions are illogical, puny human.
ReplyDeleteJust kidding. I did not read past the first sentence of this article because ... why would I waste my time on something when I can guess that it will be full of trititudes? That really would be irrational.
Your critique was interesting and took only a fraction of the time to read.
Not only is it not illogical (though arguably irrational according to some definitions), but it is not even an example of the loss avoidance he cites it as an example of! It's like saying the widespread fear of snakes makes us act ilogically, for example some people prefer options A and D in the post you made last week.
ReplyDeleteMistyped. I meant illogical, not "not illogical"
ReplyDeleteI think he means that forgoing a pay raise in such a case would not be utility-maximizing.
ReplyDeleteI think that is what he means also. And he is wrong.
DeleteOkay, then what the hell does "utility maximizing" mean then and how is it not equivalent to "accomplishing one's goals"?
DeleteWell, these people have the goal: "Don't let others get ahead of me."
DeleteBy foregoing their own raise when others would get a bigger one, they are accomplishing this goal.
Yes, I understand that. In that sense it is "rational", but does the classical/neoclassical idea of utility maximization allow for this rather neutral-sounding conception of self-interest?
DeleteIt allows any concept of self-interest one wants.
DeleteOkay, now I am really confused. What about what you are talking about here?
DeleteAgain, I don't know much about economics, but the idea about people being "rational" always pops up in discussions about policy.* Usually, it gets complaints about people not being wholly selfish or whatever, but those are probably just platitudes. So does "utility maximizing" mean something like maximizing material welfare? Or does it depend on one's interests regardless of whether or not these interests would harm a person?
*I actually don't consider whether people are "rational" or not to be relevant to most policies.
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