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August 19

Concept of Rationality in Modern Decision Theory and the "Austrian School"?

Is there any scientific work on the difference between the concept of rationality of the Austrian School and the modern decision-making theory? 2A02:908:424:9D60:F0A3:E975:DA6D:C012 (talk) 17:12, 19 August 2022 (UTC)[reply]

It would appear the Mises Institute considers the concept more relevant to behavioral economics, which (from that article's perspective) is closer to psychology as a field. I don't see any philosophizing about the finer points of "rationality" being relevant to any major area of decision-making theory, since it's all about being measurable and quantifiable, both in theory and experiment (which is all anathema to Austrians). I found a discussion of how the modern Austrian School actually deals with basic economics problems in Klein 2008, so that's probably where you want to start. The Austrian School is obviously important in the history of economics in becoming a science, but apart from just some people saying they take inspiration from the philosophy or whatever I can't see what relevance it has had for the past half century considering it fundamentally disagrees the notion that economics can even be scientific. SamuelRiv (talk) 20:31, 19 August 2022 (UTC)[reply]

Rational choice theory's predictions sometimes diverge from observed human behaviour, particularly at smaller scales. 2601:648:8201:5DD0:0:0:0:34C5 (talk) 22:18, 19 August 2022 (UTC)[reply]

Yes? Also rational choice theory is too nebulously defined to predict observed human behavior at small scales in general (and what Hayek proposes is essentially to not try to predict anything at all, so I don't know how that can be comparative). That's why there's all sorts of experiments and theoretical models for how humans calculate long-term and short-term risk and value (see for example expected utility hypothesis), given limited (or biased) information or not, and given limited time (or other psychometrics impediments -- I don't know the whole range of methodology) or not. That's just in the descriptive models by the way. There are other psychoeconomics questions like, if a person sets an objective end-term goal, how do they create an algorithm of incremental investments to get there? (And of course that relates to how the human mind might "naturally" try to create optimal algorithms in general, and whether learning certain bits of math or bias reduction techniques can improve either the algorithms or reveal if they work better or worse with cleaner data). None of these questions "care" about what grand theory of how philosophically an economist in their opening ECON 101 lecture wants to define "rational choice" (all that matters for that class is whatever gets the gist across that people will seek out best outcomes and minimize costs, and you can expand on that much later).

If you're interested in studying economics, I recommend you study it, from the ground up, with at least some classwork or research (depending on where your career is now). Just don't get married to any particular ideology. I remember going to an economics colloquium and seeing a poor undergrad get laughed at by the room when he asked during an exchange with the speaker, "But won't people seek optimal outcomes?" and the speaker replied, "Sure, congrats on your 'A' in ECON 101." I'm in a different field, but I felt really bad for the student as I have been there! (Hey academia: don't bite the newbies!) SamuelRiv (talk) 22:56, 19 August 2022 (UTC)[reply]

Law and Economics

what is economics without law and the vice-versa? and what could be gathered from the effective application of law and economics in the governance of an economy? is there a better expression or term for this synergic concept of law and economics as a whole? Grotesquetruth (talk) 19:23, 19 August 2022 (UTC)[reply]

Law and economics refers to a specific legal philosophy that says that the goal of legal systems should be to promote economic efficiency. Richard Posner (a US federal appellate judge) is a noted author in this field. Economics is basically the study of resource allocation and contention, so of course it can be studied outside the context of laws or even human societies. You can use economics principles to understand the behaviour of ant colonies, for example. I agree that real-world law without an economic context doesn't make much sense. The philosophies of legal realism or the more politically oriented Critical Legal Studies make this explicit. 2601:648:8201:5DD0:0:0:0:34C5 (talk) 19:33, 19 August 2022 (UTC)[reply]

how do these legal systems interact with economic activity in the governance of an economy? Grotesquetruth (talk) 13:50, 20 August 2022 (UTC)[reply]

That is too broad a question to answer; one could write several books about various aspects of this interaction, which may be quite different in different countries. --Lambiam 16:17, 20 August 2022 (UTC)[reply]

Economics without *the need* for law is barter.DOR (HK) (talk) 19:52, 20 August 2022 (UTC)[reply]

how so? Grotesquetruth (talk) 17:35, 23 August 2022 (UTC)[reply]

Carpet weavers during Iran hostage crisis

How did those Iranian carpet weavers manage to reconstruct shredded English-language documents during Iran hostage crisis, assuming they weren't so fluent in English, if didn't speak it at all? Were some Iranian-English interpreters involved? Our article seemingly doesn't explain that odd fact. 212.180.235.46 (talk) 20:15, 19 August 2022 (UTC)[reply]

Partly it would be just seeing if what's on both sides matched up, like a jigsaw puzzle. That would require knowing the shapes of Latin-alphabet letters, but not command of the English language. AnonMoos (talk) 22:06, 19 August 2022 (UTC)[reply]

And the level of shredding was pretty basic. The shredder used by Embassy staff turned the documents fed into the machine into long narrow strips, which could be pieced back together with some patience. More advanced shredders available today would turn similar documents into something akin to a fine powder, absolutely impossible to reconstitute. There's a similar story about the man who broke the Japanese radio code for the U.S. military during World War II not speaking any Japanese. He just figured out when re-constituted bits of audio sounded like natural sounds and no longer like static, after which he turned the results over to the translators. Xuxl (talk) 15:15, 20 August 2022 (UTC)[reply]