Monday, 15 February 2010

Beliefs not motivations

Anthony Evans at The Filter makes a suggestion I agree with:
...I recollect a conversation I had with Russ in class once, where I cast doubt on the "follow the money" implications of public choice. He suggested that if you look hard enough it's usually the case that poor policy stems from vested interests. At the time I was unable to articulate my feeling that often it's simply mistaken beliefs.
Yes indeed. In fact, many economic phenomena - micro and macro - stem from mistaken or incomplete beliefs. I am developing a model which will shed some light on this, but it may take some time.

In the meantime, a simple question. The world is complicated; and there are millions of things I could do that might very well be in my interest. How would I know about all of them?

2 comments:

PunditusMaximus said...

That's too naive. People remain mistaken when they are well-paid to do so. See also, "Mankiw, Gregory W."

PunditusMaximus said...

Heh, that was supposed to be a Dubya joke, but it came out just looking dumb.