Scot Wick Blog

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 22 of 36 Frontiers of Microeconomics Section 13 of 16 … Recently the field of behavioral economics has emerged, in which economists use basic psychology insights. We’ll consider these insights here: a· People aren't always rational b· People care about fairness c· People are inconsistent over time … b· People care about fairness Another human behavior insight is shown with the ultimatum game. This is that people care about fairness. In the ultimatum game two volunteers who are strangers are told they are going to play a game and could win a total of $100. The game begins with a coin toss to designate player A and B. Player A then must propose a division of the $100 prize between the two. After player A makes his proposal, player B accepts or rejects it. If player B accepts player A’s proposal, both players are paid as proposed by A. If player B rejects, both players g...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 22 of 36 Frontiers of Microeconomics Section 12 of 16 … Recently the field of behavioral economics has emerged, in which economists use basic psychology insights. We’ll consider these insights here: a· People aren't always rational b· People care about fairness c· People are inconsistent over time … a· People aren't always rational, continued. Understanding behavior is easier once we don’t assume people always act rationally. Why is economics built on the rationality assumption when psychology study results show people don’t always act rationally? One answer is the assumption of rationality is true enough to yield reasonably accurate models of behavior, people are mostly rational. The assumption firms rationally maximize profits yields many important and valid insights. But if we included complex psychological deviations from rationality models of firms’ behavior ...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 22 of 36 Frontiers of Microeconomics Section 11 of 16 … a· People aren't always rational, continued. Studies of human decision making have identified systematic mistakes people make. People can be overconfident. Imagine you were asked some numerical question about the number of African countries in the United Nations or the height of the tallest mountain in North America. Instead of being asked for a single estimate you were asked to give a 90 percent confidence interval a range you were 90 percent confident the true number falls within. For example, you answer “I’m 90 percent confident the tallest mountain in North America is between two and three miles high.” When psychologists run experiments like this they find most people give too-small ranges. The true number falls within their intervals far less than 90 percent of the time. A conclusion is most people are too c...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 7 Topics for Further Study Chapter 22 of 36 Frontiers of Microeconomics Section 10 of 16 … The three topics of chapter 22: 1- the economics of asymmetric information 2- political economy 3- behavioral economics … 3-Behavioral economics. Like economics, the social science of psychology is a study of choices people make. Because they mostly address different questions, the studies of economics and psychology are usually independent. Economics assumes a "rational actor." Its questions focus on allocation, incentives, and equilibrium. Psychology doesn’t assume humans are rational. Its questions focus on the internal mechanisms of behavior - why we think and feel the way we do. … Recently the field of behavioral economics has emerged, in which economists use basic psychology insights. We’ll consider these insights here: · people aren't always rational · people care about fairness · people are inco...

  Fumiko Scot's information: Weight at 165 pounds, got to 160 pounds five years ago and have recently been bouncing between 163 and 168. Common sense ways to lose and keep off weight are eat right and light and get lots of exercise. Main exercise is walking, do 1~2 miles most days. Over career worked as a salesman in the steelmaking, fasteners, and auto manufacturing industries, lots of travel in U.S., Canada, Mexico, and Japan. Have visited every U.S. city with a major league, MLB, NFL, NBA, NHL, sports team except Sacramento, have gotten as close as Travis Air Force Base. Often traveled on Sundays, much time on the road so could not eat right and get enough exercise so got heavy, up to 200 lbs. Was on commission and made enough to retire early, now eat right and light, and get enough exercise. Now am spending most time reading and writing. Our Wick branch goes back to the brother of owner of the Wick House at Morristown National Historical Park in Morristown New Jersey, and on ba...

“The world we see that seems so insane is the result of a belief system that is not working. To perceive the world differently, we must be willing to change our belief system, let the past slip away, expand our sense of now, and dissolve the fear in our minds.” - William James “All experience has shown mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.” - Thomas Jefferson “Wherever good fortune enters, envy lays siege and attacks it. And when it departs, sorrow and repentance remain behind.” - Leonardo da Vinci “Struggle is the indispensable accompaniment of progress. If men were entirely social, man would stagnate. A certain alloy of individualism and competition is required to make the human species survive and grow. Without qualities of an unsocial kind men might have led an Arcadian shepherd life in complete harmony, contentment, and mutual love. But in that case all their talents would hav...