Seeing as it has remained obscure to me for some time now, what are the main differences between the Austrian and Behavioral Economics? Or, more specifically, between Praxeology and its correspondent in the enemy camp (i.e. behavioral school).
mickanomics: nirgrahamUK:so clearly he prefered the state of affairs he thought would follow from his buying the ticket to what he thought would follow from not buying the ticket. Lets do an imaginary interview with a guy who has just bought a lottery ticket but before the result is known... Q: "Do you expect to win the lottery?" A: "No. Obviously its possible... but I don't expect to win" Q: "What will be the consequence of you not winning the lottery?" A: "I will have lost the cost of the ticket" Q: "How will your 'state of affairs' be after finding out you've not won, compared to how you were before buying the ticket?". A: "I will be less happy". Q: "Let me get this straight, you have taken an action for which you forecast that your state of affairs after the action is less good than before your action?" A: "Yes." BTW, this interview was conducted with a "desperate man" who is not getting any thrill from the gambling process.
nirgrahamUK:so clearly he prefered the state of affairs he thought would follow from his buying the ticket to what he thought would follow from not buying the ticket.
Lets do an imaginary interview with a guy who has just bought a lottery ticket but before the result is known...
Q: "Do you expect to win the lottery?"
A: "No. Obviously its possible... but I don't expect to win"
Q: "What will be the consequence of you not winning the lottery?"
A: "I will have lost the cost of the ticket"
Q: "How will your 'state of affairs' be after finding out you've not won, compared to how you were before buying the ticket?".
A: "I will be less happy".
Q: "Let me get this straight, you have taken an action for which you forecast that your state of affairs after the action is less good than before your action?"
A: "Yes."
BTW, this interview was conducted with a "desperate man" who is not getting any thrill from the gambling process.
The whole interview is mute and irrelevant. Your first question should have been.
Q: Why did you buy the lottery ticket?
A: Because I wanted to.
End of discussion. Valuation is subjective. Your trying to pass judgement on another mans subjective valuation process. Unless your intentions are to make everyone think and value things as you do you cannot do this without you yourself sounding irrational. It's like making everyone only like/eat chocolate and everyone's favorite color only being red.
Statism is a religion.
mickanomics:Is there a more user friendly and modern AE book/article/lecture which will tell me why human behavior can not be modeled by computer?
Now you're asking the right questions.
This is more Mises, but perhaps more precisely tuned to your inquiries
http://mises.org/epofe.asp
But this might be more up your alley
http://mises.org/rothbard/praxeology.pdf
If you find something evil that wobbles, push it. - Gary North
Cus you can't use math to predict how humans will behave in an exact way. Going by incentives, you only say that "other things equal, you will get more/less of this action than you otherwise would have if such and such policy had not been enacted" or that sorta thing. There's a few audio files in the media section that talk about praxeology and positivism.
liberty student: But this might be more up your alley http://mises.org/rothbard/praxeology.pdf
It still feels rather like a rather old fashioned writing style :-(
I found one very important mistake on the second page. It says "Furthermore, the fact of his action implies that he has consciously chosen certain means to reach his goals. Since he wishes to attain these goals, they must be valuable to him". While this may seem superficially to be self evident, it is actually rather too approximate. A truer version would be as follows: "Since he wishes to attain these goals, he must, at the time of making the action, be predicting that the consequences of his action will be valuable."
The consequence of my truer variation, is that it is now clear that the amount of value a man can get from his actions is at least partly dependant on his powers of prediction. For some types of action (or purchase) the prediction is pretty easy. If I buy a candy (that I have tried many times before) with a view to consuming it immediately then I don't need to be very skilled in my powers of prediction to get the expected value. However, if I purchase a long term investment, or purchase the services of an expensive lawyer (whom I've never used before), then I need to be far more skilled in my powers of prediction or I could end up with much less value (perhaps even negative) than I had hoped.
In Restraint of State:There's a few audio files in the media section that talk about praxeology and positivism.
Which do you think is best?
mickanomics: liberty student: But this might be more up your alley http://mises.org/rothbard/praxeology.pdf It still feels rather like a rather old fashioned writing style :-( I found one very important mistake on the second page. It says "Furthermore, the fact of his action implies that he has consciously chosen certain means to reach his goals. Since he wishes to attain these goals, they must be valuable to him". While this may seem superficially to be self evident, it is actually rather too approximate. A truer version would be as follows: "Since he wishes to attain these goals, he must, at the time of making the action, be predicting that the consequences of his action will be valuable." The consequence of my truer variation, is that it is now clear that the amount of value a man can get from his actions is at least partly dependant on his powers of prediction. For some types of action (or purchase) the prediction is pretty easy. If I buy a candy (that I have tried many times before) with a view to consuming it immediately then I don't need to be very skilled in my powers of prediction to get the expected value. However, if I purchase a long term investment, or purchase the services of an expensive lawyer (whom I've never used before), then I need to be far more skilled in my powers of prediction or I could end up with much less value (perhaps even negative) than I had hoped.
Just keep reading.
mickanomics:"Since he wishes to attain these goals, he must, at the time of making the action, be predicting that the consequences of his action will be valuable."
Perhaps even better would be:
"Since he wishes to attain these goals, he must, at the time of making the action, be predicting that the consequences of his action will be the lead to the greatest value of any action available to him at the time."
Esuric:Just keep reading.
I found another clear error on the same page. I started skimming towards the end because the writing style was just too horrid. I feel unmotivated to read it more carefully given such blatant errors right at the start... unless you are going to tell me he corrects them later.
mickanomics:I found another clear error on the same page.
what?
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
nirgrahamUK: mickanomics:I found another clear error on the same page. what?
"Furthermore, that a man acts implies that he believes action will make a difference; in other words, that he will prefer the state of affairs resulting from action to that from no action".
Good... but no cigar... For example someone may choose to perform an action which most probably (in their own estimation) produces a small reduction in his overall wellbeing so long as there is a sufficient (even if perhaps small) chance that there will be a large increase in his wellbeing. For example buying a lottery ticket. Usually you end up poorer but occasionally you may end up richer.
Often the excitement of the process can be reward in and of itself, in which case maybe the price paid for the ticket was still worth it... but this is not always true. Many desperate people my make analogous types of bet for which the excitement part is sadly lacking.
If the two quotes I have given from the article are part of the foundations of AE then they had better stand up to scrutiny very well... but it appears they are rather approximate :-(
mickanomics:Furthermore, that a man acts implies that he believes action will make a difference;
are you seriously disputing that? you say you are but when i actually read your content
mickanomics:Good... but no cigar... For example someone may choose to perform an action which most probably (in their own estimation) produces a small reduction in his overall wellbeing so long as there is a sufficient (even if perhaps small) chance that there will be a large increase in his wellbeing. For example buying a lottery ticket. Usually you end up poorer but occasionally you may end up richer.
you dont.
so wtf?
oh, are you saying that people buy lottery tickets even though when they buy them they think that owning a ticket does not increase their chances of winning a lottery? that people that buy tickets do not think that buying tickets help them to achieve their ends at the time when they buy them?
what are you saying?
Or it'd seem your understanding of them is very shaky, to say the least.
To darkness I condemn you...
mickanomics:It still feels rather like a rather old fashioned writing style :-(
This isn't what I would expect from a PHD but Mises learned English as a second language. He is definitely no Hazlitt. Still I have found his writings to be very scholarly and beneficially to me both from an understanding standpoint and a vocabulary standpoint.
May I suggest rather than looking for grammatical errors you actually read and try to comprehend the content? Making sentence corrections gives us the appearance that your simply being cynical and desperately trying to find flaws to point fingers at. This won't help you understand the concept of praxeology.
What has helped me on definitions is I use a Kindle and move my cursor over words I dont know. Maybe you should get one, or a Nook. Here are some quotes for you...
But to make a man act, uneasiness and the image of a more satisfactory state alone are not sufficient. A third condition is required: the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness. In the absence of this condition no action is feasible....
On Happyness
In colloquial speech we call a man "happy" who has succeeded in attaining his ends. A more adequate description of his state would be that he is happier than he was before....
There is no standard of greater or lesser satisfaction other than individual judgments of value, different for various people and for the same people at various times. What makes a man feel uneasy and less uneasy is established by him from the standard of his own will and judgement, from his personal and subjective valuation. Nobody is in a position to decree what should make a fellow man happier.
Human Action Part 1 Section 2 (Prereqs for Human Action)
mickanomics: nirgrahamUK: mickanomics:I found another clear error on the same page. what? "Furthermore, that a man acts implies that he believes action will make a difference; in other words, that he will prefer the state of affairs resulting from action to that from no action". Good... but no cigar... For example someone may choose to perform an action which most probably (in their own estimation) produces a small reduction in his overall wellbeing so long as there is a sufficient (even if perhaps small) chance that there will be a large increase in his wellbeing. For example buying a lottery ticket. Usually you end up poorer but occasionally you may end up richer. Often the excitement of the process can be reward in and of itself, in which case maybe the price paid for the ticket was still worth it... but this is not always true. Many desperate people my make analogous types of bet for which the excitement part is sadly lacking. If the two quotes I have given from the article are part of the foundations of AE then they had better stand up to scrutiny very well... but it appears they are rather approximate :-(
You do realize that you are not contradicting the original quote? Can you really have such poor reading comprehension as to not realize that your example is perfectly consonant with the original? Where do you think the disagreement is? You must be taking an extremely narrow interpretation of the original content. That is your error, not ours.
“Elections are Futures Markets in Stolen Property.” - H. L. Mencken
nirgrahamUK: mickanomics:Furthermore, that a man acts implies that he believes action will make a difference; are you seriously disputing that?
are you seriously disputing that?
Errrmmm... you cut off part of what I was quoting. I quoted "Furthermore, that a man acts implies that he believes action will make a difference; in other words, that he will prefer the state of affairs resulting from action to that from no action".
nirgrahamUK:are you saying that people buy lottery tickets even though when they buy them they think that owning a ticket does not increase their chances of winning a lottery?
No, I am not saying that.
nirgrahamUK:what are you saying?
Actually lottery tickets are not a very good example because for most people part of the reason they buy them is for the "thrill" of finding out if they have won or not. So when they lose, they are not sooo disappointed. They think, "heck, it was a thrill watching the lottery draw on the TV and I had that pleasure". But sometimes people make long-odds bets out of desperation rather than for the thrill. When that happens then at the time of making the bet the person may know full well that the most likely outcome is that they will be just a little bit poorer, but they make the bet anyway because they feel that it may be "their only chance". In those cases, when they find out they've lost, there is no "heck, it was a thrill watching the lottery draw on the TV". Instead its "damn, I wish I hadn't bought that lottery ticket/bet on that horse/invested all my money in my uncle's company/whatever".
Mick this is off topic but what school granted you a PHD?
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