walkitout (walkitout) wrote,

opportunity costs

I'm reading _Scarcity_, and it's very interesting, however I think in the end I will disapprove of the book. But I'm not sure, so I continue; also, they seem like really good human beings.

In any event, they are trying to illustrate opportunity costs. "You purchase a season ticket package for your favorite sports team."

No, I don't. But continue with further details about how much the tickets would be if purchased individually vs. in the package.

"Now imagine that the season is almost over, and you only have one game left to see. In fact, this game has a lot of buzz around it, and tickets are currently selling for $75 around town. You are about to go to the game." How much is does your ticket feel like to you now?

Well, since I would pay sometime quite a lot more than $75 to take this ticket away from me, I might actually bother to sell it, if I couldn't give it to someone who would have positive feelings towards me as a result (worth a helluva lot more to me than the money, an artifact of my own personal circumstances). I'm not going to the game either way, and whoever talked me into buying this package has already been dumped and I've further dumped everyone who thinks I should have tried to make it work out (can you tell I have strong feelings about this?).

Then the authors go on to talk about how economists answered this question, vs. how economics says it should be answered, vs. what the poors say. All of it -- and I mean _all_ of it -- ignoring transaction costs of what might be involved in actually selling the ticket.

I don't much care for economics in its canonical form. I think there are a lot of possible answers to what that ticket is "worth". Certainly less than $75, if only to account for the hassle of selling the ticket. To me, that ticket is worth some substantial negative number, because it has come to represent yet another time when I got sucked into agreeing to a leisure activity I don't enjoy to keep the peace. (I might very well break up with the person who got me to pay for the season ticket package by viciously telling them that these two tickets were worth $150 if we sold them instead of going to the game which I didn't even want to attend.)

My frustration with the book largely stems from the authors' probably conscious use of frames that are then swapped to illustrate a point. I spend a lot of energy railing against the initial frame and then its substitute -- and then wondering when the authors are going to get to what I regard as The Only Reasonable Way to Think About This.
Tags: not-a-book-review

  • Post a new comment


    default userpic

    Your reply will be screened

    Your IP address will be recorded 

    When you submit the form an invisible reCAPTCHA check will be performed.
    You must follow the Privacy Policy and Google Terms of use.