Entertaining economy from the Nobel laureate Gerry Becker
I would venture to continue the day of the entertaining economy in Habré ...
In the comments to previous topics, many joked about what would happen if you approach rationally to family matters? Well, you will not believe, but many scientists were quite seriously engaged in this issue ...
Unlike other authors, I will not lay out any of my everyday calculations that are not related to real life. And I will talk about real science - namely, the economic approach of the Nobel laureate in economics Gerry Becker . In turn, I will be based on his work The Economic Approach to Human Behavior for which he actually won the Nobel Prize.
')
What is new and original G. Becker presented to us?
In short - he extended the economic approach to the analysis of any human or even animal (sic!) Behavior!
For example, it turned out that suicide may well be completely rational from an economic point of view ...
It is known that the economic approach implies certain assumptions (completeness of information, selfishness, individual independence), which have been challenged many times. However, one assumption remains always: man is assumed to be a rational being, i.e. constantly maximizing their utility functions (preferences are always stable).
From here several important consequences follow. For example, the law of demand and the law of supply . However, before Gerry Becker, economists applied their principles only to the analysis of the markets for goods and services. Mr. Becker decided to try these principles to analyze any behavior.
But enough theory - let's look at a couple of examples:
1. The economic approach implies that there is an “optimal” life expectancy at which the utility of an additional year of life is less than the utility lost as a result of using time and other resources to achieve it.
According to the economic approach, therefore, most deaths (if not all!) Are to some extent suicides - in the sense that they could be delayed if more resources were invested in life extension.
2. According to the economic approach, a person decides to marry when the expected usefulness of the marriage exceeds the expected usefulness of the bachelor life or the additional costs incurred by continuing to search for a more suitable pair. Similarly, a married person decides to interrupt him when the expected usefulness of returning to idle status or entering into another marriage exceeds the loss in utility associated with divorce (including due to separation from children, division of jointly acquired property, judicial expenses, etc.). Since many people are looking for a suitable pair for themselves, we can talk about the existence of a marriage market. Everyone tries to do everything that only he or she is capable of, despite the fact that all the others behave in the same way in this market.
3. The economic approach is based on the premise that criminal activity is the same profession that people devote to full or part-time work, like joinery, engineering or teaching . People decide to become criminals for the same reasons that others become carpenters or teachers, namely because they expect that the "profit" from the decision to become a criminal is the reduced value of the whole amount of the differences between benefits and costs, both non-monetary and monetary. - exceeds the "profit" from the occupation of other professions. Increasing the benefits or reducing the costs of criminal activity increase the number of people becoming criminals, raising — compared to other professions — the “profit” of offenses.
And I must say that these are not just words. All this allows us to really “count” human behavior and draw many practical conclusions.
Want to look at real tsiferki and formulas - here's a list of references:
1. Becker GS Altruism, Egoism, and Genetic Fitness: Economics and Sociobiology //
Journal of Economic Literature, 1976, v.14, p.817–826 as well as other articles by the author
2. Schultz TW (ed.). Economics of the Family: Marriage, Children, and Human Capital.
Chicago: University of Chicago Press for the NBER, 1974.
3. Hamermesh D. and Soss NM An Economic Theory of Suicide // Journal of Political
Economy, 1974, v.82, p.83–98. (I especially like this one)
PS Everything written above is a brief retelling of the ideas of the scientist and is in no way consistent with the point of view of the author of the topic.
In the comments to previous topics, many joked about what would happen if you approach rationally to family matters? Well, you will not believe, but many scientists were quite seriously engaged in this issue ...
Unlike other authors, I will not lay out any of my everyday calculations that are not related to real life. And I will talk about real science - namely, the economic approach of the Nobel laureate in economics Gerry Becker . In turn, I will be based on his work The Economic Approach to Human Behavior for which he actually won the Nobel Prize.
')
What is new and original G. Becker presented to us?
In short - he extended the economic approach to the analysis of any human or even animal (sic!) Behavior!
For example, it turned out that suicide may well be completely rational from an economic point of view ...
It is known that the economic approach implies certain assumptions (completeness of information, selfishness, individual independence), which have been challenged many times. However, one assumption remains always: man is assumed to be a rational being, i.e. constantly maximizing their utility functions (preferences are always stable).
From here several important consequences follow. For example, the law of demand and the law of supply . However, before Gerry Becker, economists applied their principles only to the analysis of the markets for goods and services. Mr. Becker decided to try these principles to analyze any behavior.
But enough theory - let's look at a couple of examples:
1. The economic approach implies that there is an “optimal” life expectancy at which the utility of an additional year of life is less than the utility lost as a result of using time and other resources to achieve it.
According to the economic approach, therefore, most deaths (if not all!) Are to some extent suicides - in the sense that they could be delayed if more resources were invested in life extension.
2. According to the economic approach, a person decides to marry when the expected usefulness of the marriage exceeds the expected usefulness of the bachelor life or the additional costs incurred by continuing to search for a more suitable pair. Similarly, a married person decides to interrupt him when the expected usefulness of returning to idle status or entering into another marriage exceeds the loss in utility associated with divorce (including due to separation from children, division of jointly acquired property, judicial expenses, etc.). Since many people are looking for a suitable pair for themselves, we can talk about the existence of a marriage market. Everyone tries to do everything that only he or she is capable of, despite the fact that all the others behave in the same way in this market.
3. The economic approach is based on the premise that criminal activity is the same profession that people devote to full or part-time work, like joinery, engineering or teaching . People decide to become criminals for the same reasons that others become carpenters or teachers, namely because they expect that the "profit" from the decision to become a criminal is the reduced value of the whole amount of the differences between benefits and costs, both non-monetary and monetary. - exceeds the "profit" from the occupation of other professions. Increasing the benefits or reducing the costs of criminal activity increase the number of people becoming criminals, raising — compared to other professions — the “profit” of offenses.
And I must say that these are not just words. All this allows us to really “count” human behavior and draw many practical conclusions.
Want to look at real tsiferki and formulas - here's a list of references:
1. Becker GS Altruism, Egoism, and Genetic Fitness: Economics and Sociobiology //
Journal of Economic Literature, 1976, v.14, p.817–826 as well as other articles by the author
2. Schultz TW (ed.). Economics of the Family: Marriage, Children, and Human Capital.
Chicago: University of Chicago Press for the NBER, 1974.
3. Hamermesh D. and Soss NM An Economic Theory of Suicide // Journal of Political
Economy, 1974, v.82, p.83–98. (I especially like this one)
PS Everything written above is a brief retelling of the ideas of the scientist and is in no way consistent with the point of view of the author of the topic.
Source: https://habr.com/ru/post/83341/
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