Thursday, November 03, 2005
Chess Men
I am sitting in economics, paying attention to the extent that I can with Salmasi being his usual monotanous self. It is striking to me that in economics there are a number of laws that define why people do things. People are chess men to be manipulated. The firm adapts its policy because it percieves that people will react a certain way. It is precisely like a well played game of chess, where you move your pieces in anticipation of what the other person will do, maneuvering yourself to take advantage of his or her actions. Chess is a zero-sum game..you can only gain at the expense of the other person. Economics, on the other hand, is a non-zero sum game between producers and consumers. Both parties gain from interaction, and although each may benefit to different degrees in different transactions, there is a net gain in utility. In a capitalist system, people will not buy anything that they percieve to have less utility than the money they are giving up. Similarly, companies will not produce something if they cannot produce it for a value less than that for which they can sell it (P>AVC) This leads me to think of an interesting theory of development, wherby the rate at which a society develops is based on the net percentage increase of non-zero sum interaction in the society. I wont go into that thought, because I just thought of it and havent had time to think through the implications. What I wanted to discuss are the interactions on the human level. The interactions I have with my friends, family, associates etc. Are these interactions rational? Do people unconciously use the people they know as chess men? Are their interactions zero-sum? what implications does this have? I believe that the way I interact with others is fairly rational. However, I have observed some very irrational actions in others on a consistent basis. Why is this? Is what they are doing somehow rational to them? Class is over..but ill have to think more on this. Philosophy is so interesting.
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