Can you agree that if the explanation happens to be increase in the reservation demand for labour/time on the part of labourer then in such a particular case this is not a disequilibria that should best be ‘intervened’ away; but rather a new equilibria reflecting the changed values of real individuals. (for whatever reasons, quirky or otherwise)
I am having difficulty defending the DNWR hypothesis since I am not a strong advocate; however, I will agree with you that resisting downward wage movements can simply be a preference and hence isn’t objectively wrong; that is, if workers are negotiating for a particular wage and they obstain such a wage, then that is evidence of a valuable arrangement for all parties. However, there are other cases for DNWR (such as long-term contracts that fix nominal wages above real-world conditions during business fluctuations, etc.).
I also do believe, though, that our idiosyncratic psyches (as contingently evolved, limited mammals) leads our decision-making machinery to suboptimal results. DNWR may or may not be an actual example of this, but I do believe there are valid examples (e.g., Richard Thaler has plausible research).
Yes, but the suboptimal results you are referring to are merely results that do not coincide with your own personal and arbitrary value judgements. Modern economy theory still believes in objective values. Equilibrium = good, disequilibrium = bad, ect, ect. Government intervention is appropriate, they say, when markets are not in equilibrium (which is always the case). But this entirely ignores the law of unintended consequences and the subjectivity of value.
I don’t know if I agree with this. To accept this is to accept that there can be some sort of strange equilibrium in a socialist system (individuals may prefer completely destitute conditions if they are ideologically attached to socialism). Equilibrium has a very precise definition.
To accept this is to accept that there can be some sort of strange equilibrium in a socialist system (individuals may prefer completely destitute conditions if they are ideologically attached to socialism)
I didn’t have ascetics in mind even though there is no reason that someone could not adopt those values in anarchy http://en.wikipedia.org/wiki/Asceticism
Someone, that wins the lottery and has savings, might have a vast increase in his reservation demand for his ‘labour’, such that he would prefer to spend time in casino’s and sipping deluxe cocktails on pristine beaches. and the wage that kept him at his desk yesterday is not sufficient to do so today.
Esuric, I do believe that Kaldor-Hicks efficiency is a worthy goal. If wealth could have been maximized but wasn’t, then I believe the agents involved could have satisfied their own interests in a superior way from their own values.
my opinion? it’s a whole lotta rubbish.
Perhaps behavioral economics is more akin to neuro economics. This is perhaps where if known the interactions of chemicals in the brain and the concentration and saturation of nerons with these chemicals that then produce an output.
chemicals can act as natural resources or perhaps act as “capital goods” and nerons might act as capitals goods/or consumer goods.
Perhaps our act is the result of the final consumer good of a capital structure in the brain. In which time, natural resources gained in a sence from another market (digestive system, ect), and labor(entreprenure), in which our pursuit results in consumption(emotions,ect) or investment(logic, rational).
These concepts seem to mesh in some manner… probabley better suited to catalactics.
All Austrians who I know who have seriously dealt with experimental economics love it, e.g. Ben Powell who wrote the paper ‘Why Austrians should stop worrying and love the lab’ (or something).
We mustn’t forget that behavioral economics - i.e. Vernon Smith for one - is inspired by Human Action. http://www.cato.org/pubs/journal/cj19n2/cj19n2-1.pdf
The Powell paper is here: http://mises.org/journals/scholar/powell3.pdf
I think he makes a very strong case of it. The bottom line is: we shouldn’t see it as a way of testing theory, but as expanding empirical observation. I’ve already gone through great lengths at this forum to explain the Misesian relationship between theory and history; this seems just something that adds to it.
Edit: Actually; this post is completely irrelevant.