PEOPLE CARE ABOUT FAIRNESS

PEOPLE CARE ABOUT FAIRNESS Another insight about human behavior is best illustrated with an experiment called the ultimatum game. The game works like this: Two volunteers (who are otherwise strangers to each other) are told that they are going to play a game and could...

PEOPLE ARENT ALWAYS RATIONAL

PEOPLE ARENT ALWAYS RATIONAL  Economic theory is populated by a particular species of organism, sometimes called Home economicus Members of this species are always rational. A3 firm managers, they maximize profits. As consumers, they maximize utility (or equivalently,...

BEHAVIORAL ECONOMICS

BEHAVIORAL ECONOMICS Economics is a study of human behavior, but it is not the only field that can make that claim. The social science of psychology also sheds light on the ch~ice” that people make in their lives. The fields of economics and cytology usually...

POLITICIANS ARE PEOPLE TOO

POLITICIANS ARE PEOPLE TOO When economists study consumer behavior, they assume that consumers buy the bundle of goods and services that gives them the greatest level of satisfaction. When economists study firm behavior they assume that firms produce the quantity of...

Farm Policy and Politics

Farm Policy and Politics What motivates politicians? Humorist Dave Barry offers an answer with his analysis of the Farm Security Act, which the U.s Congress passed and President Bush signed in 2002 . Farmer on the Dole If you’re like most American taxpayers, you...

THE MEDIAN VOTER IS KING

THE MEDIAN VOTER IS KING Despite Arrow’s theorem, voting is how most societies choose their leaders and public policies, often by majority rule. The next step in studying government is to examine how governments run by majority rule work. That is, in a...