Tag Archives: Decision Making

SUB(stituting)?

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If you’ve spent any time at UPS, you’ve probably thought at some point, “Is there actually going to be anything good at the SUB today, or should I go off-campus?” While the connection between economics and going to the SUB may not be clear, just remember that economics is the study of how people make choices. I’m currently taking an Economics of Online Dating class (Econ 341), which has a large focus in economic model building. A couple weeks ago, we were asked to create a model of decision-making under risk. Risk is defined as a situation in which all possible outcomes and Continue reading SUB(stituting)?→

The Price is Wrong

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This may not be the easiest pill to swallow, but worldwide, energy prices are far too low. In the United States, on average, the federal U.S. tax on gasoline has remained at merely 18 cents per gallon since 1993. We all know that there are negative effects that come with the overconsumption of nonrenewable energy, but is it reflected in the prices? When gas, or any other fossil fuel, is bought at market price, the cost fails to account for the environmental and social impacts that come with the production and consumption of these fuels. This issue is called a Continue reading The Price is Wrong→

The Science of Decision-Making: Behavioral Economics

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Most economic models and theories rely on the assumption that people (consumers, producers, etc.) are rational. The idea of homo economicus, or the “economic human”, represents the perfectly rational and perfectly imaginary individual represented in most of economics. The assumption of rationality keeps models straightforward and results consistent. Rational people buy low and sell high, they always purchase a perfectly balanced bundle of goods that satisfies them completely, and they definitely consider consumer/producer surplus when buying Christmas presents and/or the opportunity costs when buying a house or a car. The economic human is psychologically rational and fundamentally self-interested. However, we Continue reading The Science of Decision-Making: Behavioral Economics→

Problems with Procrastination

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Whenever I have major deadlines encroaching, I suddenly find YouTube and Facebook utterly fascinating and irresistibly amusing. I end up spending my scarce time randomly surfing the web despite the hours of work I have yet to do. Looking back, I often wonder how I could have possibly justified watching hours of YouTube videos? I mean I’m an economist for heaven’s sake! I am well versed in cost-benefit analysis. I understand the inner workings of achieving market efficiency. So why, despite all my econ know-how, do I often find myself regretting the choices I have made? To better understand my Continue reading Problems with Procrastination→