Barkley writes: >>Although pretty screwy, one could have rising
MU of money without a rising MU of income, a "Scrooge effect" as
it has been called in the literature.<<
The screwy Scrooge syndrome?
It seems to me that all this says is that the neoclassical
utility-max model can absorb absolutely anything. We can describe
the Marquis de Sade's utility function if we assume that certain
so-called "bads" (like being whipped) are "goods" to the good
Marquis. The clients of Dr. Kevorkian of course have decided that
the marginal utility of living is less than that of dying (as did
Gary Becker's wife). The model is tautological! As usually
defined, "rationality" involves consistent efforts to attain
given goals. But what if one of one's goals is to enjoy
inconsistency?
U-max may be a useful assumption for constructing a model
(helping one to get a degree, a job, tenure, or promotion). But
if we want to understand the Scrooge effect, sadism, suicidal
tendencies, or schizophrenia, we should look into the abnormal
psychology literature. For some reason economists don't do that
-- is it because economists don't want to deal with the problem
of endogeneity of preferences? Akerlof's stuff on cognitive
dissonance seems one of the rare exceptions to the rule.
It seems to me that if the purpose of the economy is supposed to
be to serve the people, or if (as neoclassicals are wont to do)
one sees "tastes" as the prime mover in the economy, we should
have more psychological knowledge than economists currently
embrace. But economists run from psychology, unless it's
behaviorism.
To repeat my comment about game theory: how come people spend so
much ink on the prisoner's dilemma and none on the nice cop/bad
cop of evoking confessions? (My unscientific sample indicates
that the latter is used much more often.)
in pen-l solidarity,
Jim Devine [EMAIL PROTECTED]
Econ. Dept., Loyola Marymount Univ.
7900 Loyola Blvd., Los Angeles, CA 90045-8410 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
(a dance for the election, 2nd installment)
"Bend over making everybody happy.
Now let the other guy lead.
Try appearing Jeffersonian,
Bring another crony in.
Everybody do the Clinton.
(chorus) "Come and slide over over to the middle.
Straighten up and step light.
Lean it to the left a little.
Now lean a lot to the right."
-- Roy Zimmerman of the Foremen ("Do the Clinton")
