Cost: Economic Proof of YOLO

As promised on Monday, I’ll talk a little bit about ‘Cost’ and what it really means. If you’re lazy, you could think of cost as the opposite of value and be on your merry way.

BUT, if you’re still reading this, then I’ve just determined something about your schedule today. The utility you get from reading this post is higher than the ‘Opportunity Cost’ of doing so (a.k.a. the potential utility you could have obtained by stopping after the second sentence above and doing something else). I’m flattered, really.
Continue reading Cost: Economic Proof of YOLO

Value: Money and Time Travel

An almost-intentionally ambiguous term used a lot in economics is ‘Value’. Another is seen as the opposite of value, ‘Cost’, but I’ll get to that on Wednesday. One way that value could be defined is, via Behavioral Economics, the amount of utility than an object gives you. If you find an old book that cost you five bucks twenty years ago in your attic, you might sell it on Amazon for five dollars. If you find the same old book and it turns out to be written by a distinguished but minimally-publicized author (read: his books are popular and rare), you might sell it at auction for $10,000. If the author was your dear grandfather, whom you fondly remember, it might not be worth it to sell it at any price. The point of this exercise is that value is as connected to external context as it is to implicit worth of the object. Some things are hard to put a price on for this reason…

But let’s ignore ALL OF THAT for now.
Continue reading Value: Money and Time Travel

Econ 9001

Before things get a little crazy around here (ninjas, teleportation, and the black market are likely to make appearances in the next month alone), I figured I’d introduce some simple Economics terms. Consider this to be a sort of cheat-sheet for explaining terms you might not be familiar with. Most things should make intuitive sense… Continue reading Econ 9001

Welcome! Now, I know what you’re thinking…

Hello! Welcome, make yourself comfortable. Help yourself to anything in the fridge…

For those of you too lazy to read the About page, this is a blog where I post my crazy ideas about economics. As such, let me explain first what I consider ‘Economics’ to be, and how this blog will go.

‘Economics’ is a term that intimidates many people. People think of finance, wall street, politics, international trade, etc. While those are all applications of economics, economics itself has a much simpler definition. Basically, a long time ago, somebody thought, ‘Huh, I wonder why that person did that…‘ and BOOM! Economics was born. Now, you might say that that’s psychology, not economics. I would counter by saying that it doesn’t matter. Economists look at people’s behavior in a slightly more rational and/or mathematical way than most psychologists do (economists also always assume everyone is a selfish bastard, always). Why does a butcher sell meat? It isn’t because he loves to sell meat (although that would most assuredly help with having to hang out with animal carcasses all day). No, it’s because people like to eat meat and so they’ll pay him good money to give it to them. (For those more experienced economists out there, yes that was me butchering a quote from Adam Smith, and yes, that pun was 100% intended).

As far as this blog is concerned, I feel that the same attention that Economists have historically given to butchers, used cars, and prisoners should be given to ninjas, teleporters, and Chinese food delivery guys. I’ll start out posting theories on Monday and Wednesday mornings, and I’ll reply to any interesting comments on Fridays. Hope you enjoy!