[lbo-talk] Economics drivel

Bill Bartlett billbartlett at enterprize.net.au
Tue Jun 10 16:58:20 PDT 2003


At 6:23 PM -0400 9/6/03, Barkley Rosser wrote:


> I hate to start sounding like a technical economist,
>but indeed, "a bird in hand is worth two in the bush,"
>is not opportunity cost at all, but what is now coming
>to be called the "endowment effect," which itself is a
>discovery of the behavioral economists that goes against
>the grain of standard neoclassical economists. If you
>have something you really do not want to give it up, but
>if you don't have it, then it is not such a big deal.

Actually, "endowment effect" is not at all the same concept as "a bird in hand is worth two in the bush." The latter is intended to remind us of the fact that something you actually possess is not to be sacrificed something which you have only a sporting chance of acquiring. If I've bagged a quail, then it is a quail I can eat. Not a big meal, for sure, but a damn sight more nourishing than the two quail that might get away.

There are exceptions to this of course, if you go to a pheasant game farm to shoot your birds, they will usually charge you a set fee to release a certain number of birds, whether or not you actually succeed in shooting them. In which case the bird in the bush will cost you as much as the bird in your hand. (The game farm manager will probably bag those you missed after you go, its a 'perk' of the job.)

The "endowment effect" theory is as you describe it, you simply don't grasp the concept of "a bird in hand is worth two in the bush".

Bill Bartlett Bracknell Tasw


>This was discovered in contingent valuation studies of the
>environment. People will demand to be paid much more
>for a 10% decline in enviro quality than they are willing to
>pay for a 10% increase in enviro quality. An average of
>the by now voluminous studies would suggest that the
>ratio is likely to be about 3 to 1, although some have it as
>high as 10 to 1, easily. This violates standard economic
>theory, although not most peoples' common sense.
>Barkley Rosser
>----- Original Message -----
>From: "Wojtek Sokolowski" <sokol at jhu.edu>
>To: <lbo-talk at lbo-talk.org>
>Sent: Monday, June 09, 2003 4:00 PM
>Subject: RE: [lbo-talk] Economics drivel
>
>
>> Doug:
>> >
>> > Actually "opportunity cost" is one of the few concepts I'm grateful
>> > to formal economics study for. It's not the same as bird in hand. I
>> > can't think of any colloquial equivalent for it.
>> >
>>
>> It depends how you count those birds. If you have to give up one that
>> you already have for the two that you might catch on the bush (which is
>> how I read the saying) - you will get a gist of "opportunity cost" - no?
>>
>> But again, my problem is not with economic modeling but with economic
>> modeling turned into ruling class ideology. It is the same as
>> "marxism-lenininsm" in fSU, or geo-centrism in the middle ages.
>>
>> Wojtek
>>
>>
>>
>> ___________________________________
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>
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