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wonderpup

Acadamic Choice Theory

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This is a spoof but does present an interesting take on idea that Economists themselves must be as driven by self interest as their own theorys predict other people are- an obvious point that certainly never occured to me.

I decided to correct this oversight by developing my theory of Academic Choice, in which economists are theorized as rational agents who continually seek to maximize their future earnings potential.
Q) Isn’t it offensive to assume that economists, for motives of personal gain, shade their theoretical allegiances in the directions preferred by powerful interest groups?

A) How could it ever be offensive to assume that a person acts rationally in pursuit of maximizing his or her own utility? I’m afraid I don’t understand this question.

:lol::lol::lol:

Also this:

Q) Is it really plausible that economists threaten top banks that in the absence of some kind of payoff, they will change the theories they teach in a direction that is less favorable to the banks?

A) There are certainly cases in history of the following sequence:

a. Economist E espouses views that are less favorable to certain special interest groups S. Doing so threatens the ability of S to extract rent from the public.

b. Later, E changes his view, thereby withdrawing the prior threat.

c. Still later, E is paid large amounts of money by representatives of S in exchange for services that do not appear particularly onerous.

For example, let E = Larry Summers and let S = the financial services industry. In 1989 E was (a) a supporter of the Tobin tax, which threatened to reduce the rent extracted by S. This threat was apparently later withdrawn (B), and in 2008 E was paid $5.2 million © in exchange for working at the hedge fund D. E. Shaw (an element of S) for one day a week.

So- by including the Economics establishment itself in it's own model of rational self interest we can see why so few of them were in position to see the crisis of 08 coming- it was not in their own interest to develop this critical facility. :D

http://www.nakedcapitalism.com/2011/04/blacklisted-economics-professor-found-dead-nc-publishes-his-last-letter.html

Edited by wonderpup

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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