When developing an economic model, the researcher makes assumptions that captures the behavior of the economic actors. If the data doesn't fit the model, the researcher develops new assumptions. As a social science, economics has many shades of gray in the core definitions. For example, what is "utility"?
Jeremy Bentham believed that economic animals sought pleasure and avoided pain. In microeconomics, we contend that goods will be consumed so as to maximize utility, or pleasure.
Suppose Juan only wants to sit home and play video games. I assume that Juan derives a great deal of pleasure since he is giving up athletics and many social occasions. So if Juan plays Terminator X all day, he is maximizing his utility--perhaps at a decreasing rate.
I contest this assumption since playing video games does not accomplish anything so his life has no meaning. Since his life has no meaning, Juan's actions do not provide utility. In other words, a rational economic actor must accomplish something in order for it to be utility. Playing games doesn't accomplish anything.
A nihilist would disagree since our lives have no meaning since nothing matters. I hardly believe Bentham was a nihilist.
Socrates believed that the unexamined life was not worth living. In my words, this means that a full life is one filled with academic inquiry and discovery. In my example, Juan's life is devoid of examination and, therefore, not worth living.
Economists often disagree on what utility means. I now posit that utility theory only applies to actors who seek out to accomplish goals and incur opportunity cost because of their actions. This definition will allow us to reasonably predict actions.
I submit that the utility gained by playing video games is real in that it provides an emotional payback for the time spent - psychic income. There clearly is no material profit, but that would apply to many pleasurable pursuits.
ReplyDeleteHowever, you and I might agree that the utility gained is transient to a large extent. Part of the reason for my belief is that relatively few games seem to offer ongoing utility through repeat playability. Sports games do, but many others fall into the category of play it until you "beat the game" then trade it in.
nice post. thanks.
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