Class Notes test 3 - The Rational-Actor Assumption In law no one is damaged by his own action In economics revealed preference Need gov to fix market

Class Notes test 3 - The Rational-Actor Assumption In law...

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The Rational-Actor Assumption In law: no one is damaged by his own action In economics: revealed preference Need gov. to fix market failures In political philosophy: the harm principle and anti paternalism Paternalistic actions, interventions by the government coerceively because you don’t think they will do the rght thing on their own, ruled out by harms principle. Liberalism- one way to think about it is to let them be free What groups of people do we think paternalistic intervention is justified? Children —parents can intervene to make a child go to bed Temporarily incapacitated people—assume someone knocked out in a car accident wants medical attention and help Mentally disabled- cognitively/physiatrist Market failure: situations where voluntary actions won’t get you to a better place Family, workplaces Rational actors do not procrastinate, our entire legal notion is based on people acting rational Economic of real preference: wanna know what someone does? Just ask them, their choice will tell you Contrary Evidence Temptation: Regret Weakness of will Addiction/bad habits Sources of imperfectly rational behavior Time: Hyperbolic discounting Somebody whose actions are dominated by that sort of impatient behavior, where an immediate future is a big deal (greatly valued future) they will not have consistent behavior over time Preference reversals Risk- Prospect theory- evauluatin of gains and losses. Someone acting under behavioral will prefer Optimist biases/ lake wobogen effects- p-value in the decision tree. Lake wobogen, all the women, men, strong are above average. Most people think their lucky, if they know the expected probability they think their probability is higher Fear and desire: visceral effects People under the influence of desire and fear isn’t explained by economic Urgency: hot cognition Double the weight between the behavior and he consequence, not consistent with the rule of discount in economics—there is a much slower rate of change. Rational actor discounting approach Domains of imperfect rationality Food Sex
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Drugs Borrowing and saving Adherence to medical advice Procrastination Self-command and self-strategy Sirens- someone imagining his future need and arranging to be unable to act on it—self strategy Odysseus before he saw the sirens, treated the odysseus later as a person that needed to control Shelley- short term impulse concerned about our long term. Is Self-command measurable? Conscientiousness Impulsivity and impulse control Trained on a task, green light goes on hit the blue button. Then add a condition, (red arrow on the screen). Ability to stop what you intended to do can generalize other things The marshmallow experiment Bunch of children, put a marshmallow infront of them. In 10 min, if the marshmallow is there still in 10 min then I’ll give you another one. According to
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