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Intro to Bounded Self Interest

Intro to Bounded Self Interest - PPE 203/PSYC 265 PPE...

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PPE 203/PSYC 265 Lecture for 3/29/12
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Homo economicus is often described as rational and: circle5 Completely/totally/incorrigibly selfish circle5 Self-interested circle5 Profit-maximizing circle5 Money-maximizing circle5 In what way is selfishness integral to rationality?
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Generosity puzzles
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We could weaken our definition to say that homo economicus maximizes “present aims,” whatever they may be, but this has its problems, too. its problems, too. circle5 The crankcase oil problem
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Social preferences circle5 Concern for more than our narrow self-interest can lead to several anomalies for orthodox theory circle5 People refuse/resent prices that reflect supply & demand and leave them with surplus circle5 Third parties may prevent others from trading circle5 People may cooperate when not cooperating is dominant
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Of the 3 sections, bounded self- interest gets by far the least attention. Perhaps one reason is that, opposed to earlier sections that dealt with a normative model, economics holds no default ethical position. What is the normative model from which to deviate (if not selfishness)? -you can, however, be inconsistent with your own principles; framing matters in this section just like everywhere else
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Ethics of economics circle5 Respect for transactors –people are capable of choosing for themselves circle5 Respect for people’s preferences circle5 Treat all market demands equally
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A shipment containing 12 grapefruits and
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