[lbo-talk] Economics drivel

martin schiller mschiller at pobox.com
Fri Jun 13 12:49:15 PDT 2003


a msg from rosserjb at jmu.edu on 6/13/03 8:49 AM included ...


> Well, the sort of thing you are talking about
>here is known to behavioral economists, but it
>has not really gotten an agreed upon label yet.
>"Inertia" looks like the leading candidate, but
>that is hardly at the level of use or acceptance
>that "endowment effect" is. It is distinct from the
>endowment effect, however.
> Essentially it is an aspect of bounded rationality.
>People like to continue with existing financial
>arrangements unless they become strongly convinced
>that there is a reason to change them. Lots and
>lots of people in the US, and this includes supposedly
>intelligent and well-educated people, have pension
>arrangements that are simply stupid. However, they
>have them because they were the default option at
>their place of employment and they simply do not wish
>to think about the issue. It is a "waste of their time,"
>or a "nuisance to think about," it "makes my head ache."

The behavior reminds me of the 'expectation' that we have of our government - that it will utilize the collective wisdom of the culture to exercise the most effective use of resources in obtaining the social necessities. And then tell us how to comply. (Economics?)

Expectation (hope) might be more apt than inertia.



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