For the past year or two I have been thinking that economics is the root cause of all decisions. Not economics in the normal sense of transactions involving money, but rather economics as always trying to obtain increase. Now this increase could be in prestige, influence, knowledge, faith, or anything which an individual values.
The theory is that for every type of situation (with kids, with spouse, family, work, school, church, bar, whatever) a person has a hierarchy of values; for example when I am at school my values, are getting information, socializing, grades, and networking in that order. However, when at home my values shift to making wife happy, making kids happy, sleeping in that order.
I think that whenever a decision needs to be made there is a mental process of comparing the foreseeable results of a decision in the view of how you will gain with respect to the values of the situation. So at home I am faced with a decision of helping a child play a game or helping my wife cook dinner, this one is easy because I can help the child increasing the child's happiness which in turn increases my wife's happiness and I acted in accordance with my top two values generating good feeling for me. When I am at work however, and a child needs help I ignore it, or spend little time or effort on the problem because my values are different and a child's happiness is much farther down on the list than production.
The interesting part of this theory comes when two different value sets that are in opposition come into contact. The hypothetical would be in a business setting where the top value is acquisition of wealth and an opportunity comes along to greatly increase wealth but is illegal. This then effects not only the work value system but also potentially social values (increased prestige if it works, or shunning if it fails), religious/moral values (right versus wrong) and possibly others. Before a decision can be made a person must determine which values have the highest priority and which value set will generate the greatest return on the decision made.
I thought that with this system a researcher could figure out the values of individuals in a way that you could begin to determine how a person will act in any given situation. The problem is that the whole premise rests on circular logic;
A person acts in a certain way because of the value set in play during certain situations.
How do you know what they value?
Because of how they acted.
Why did the person act that way?
Because of their values......
but it is still fun to think about.
4 comments:
Interesting to think about.
Mom
You are absolutely right. Every decision is an economic one. People weigh the alternatives and subconciously analyze the costs and benefits of alternative courses of action. The various costs and benefits will depend on the individual. It's facinating that economic decisions are so intuitive for people. Some say that they don't know much about economics, but even a child makes good economic decisions every day.
Yes children do make good economic decisions every day, but not in the way that most economists would quantify it. I think that most of the decisions are based upon non-monitizeable motivations and therefore not captured by the economist mindset.
I certainly don't act as a rational actor from an economists point of view, but there is still an underlying rationality about my actions.
Well, it is me so only about half of my actions are rational, the rest is just random fun
Actually, economists don't typically focus on money. They talk about costs versus benefits. Economic decisions can have nothing to do with money. Every single decision follows the process of weighing alternatives and choosing the best one for ourselves.
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