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| Guest |
 Posted: Sun Jan 08, 2006 7:30 pm |
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Gentlemen,
I have been thinking about an economic concept which I am sure is not
original, but I can't put a name to it. I feel like I should know
this, but I don't. I wonder if anyone could tell me what it is called
and where I might do some reading on it.
Let's suppose there is a good which I would like to have and which has
a market price of $50. Let's suppose I am not willing to pay this
price for the good. Yet, if I was given the good as a gift, I also
would not sell it for $50. Assume that I am not sentimental about the
gift, and there are no transaction costs in buying or selling. Also,
there is no significant impact on my marginal utility of holding money
caused by buying or selling the good. Rather I am simply unwilling to
pay $50 for the item and at the same time unwilling to receive $50 for
the item...I will choose to remain in whichever condition I find
myself.
Is just an example of being close to a point on an indifference curve?
Is it just an example of satisficing? Does this concept have a name
and where can I read about it?
Thanks,
Craig |
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| Robert Vienneau |
| Posted: Tue Jan 10, 2006 5:25 am |
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Guest
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In article <1136766623.149119.185110@f14g2000cwb.googlegroups.com>,
rmorea@satx.rr.com wrote:
[quote:8701779087]I have been thinking about an economic concept which I am sure is not
original, but I can't put a name to it. I feel like I should know
this, but I don't. I wonder if anyone could tell me what it is called
and where I might do some reading on it.
Let's suppose there is a good which I would like to have and which has
a market price of $50. Let's suppose I am not willing to pay this
price for the good. Yet, if I was given the good as a gift, I also
would not sell it for $50. Assume that I am not sentimental about the
gift, and there are no transaction costs in buying or selling. Also,
there is no significant impact on my marginal utility of holding money
caused by buying or selling the good. Rather I am simply unwilling to
pay $50 for the item and at the same time unwilling to receive $50 for
the item...I will choose to remain in whichever condition I find
myself.
Is just an example of being close to a point on an indifference curve?
Is it just an example of satisficing? Does this concept have a name
and where can I read about it?
[/quote:8701779087]
You should be interested in "framing effects", as described in the
literature on experimental economics. Experimentally, the theory of
utility maximization is incorrect.
--
Mostly economics: <http://www.dreamscape.com/rvien/#PublicationsForFun>
r c
v s a Whether strength of body or of mind, or wisdom, or
i m p virtue, are found in proportion to the power or wealth
e a e of a man is a question fit perhaps to be discussed by
n e . slaves in the hearing of their masters, but highly
@ r c m unbecoming to reasonable and free men in search of
d o the truth. -- Rousseau |
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| Dan in Philly |
| Posted: Tue Jan 10, 2006 9:01 pm |
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Guest
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"Robert Vienneau" wrote in message ...
[quote:888eda31b8]In article , rmorea@satx.rr.com wrote:
Let's suppose there is a good which I would like to have and which has
a market price of $50. Let's suppose I am not willing to pay this
price for the good. Yet, if I was given the good as a gift, I also
would not sell it for $50. A
You should be interested in "framing effects", as described in the
literature on experimental economics. Experimentally, the theory of
utility maximization is incorrect.
[/quote:888eda31b8]
IIRC:
About 10-15 years ago, at an economic conference, small gifts were put under
the seats of the audience, either a nice pen or a coffee mug. One of the
speakers told the audience members to pick up their free gifts and open
them. Then he told them to trade with the person next to them, if the other
person wanted to.
Almost no one traded, even though the initial gift assignment was random.
Proving that people are biased toward what they already have.
Dan in Philly |
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