October 1 Lecture - October 1 2012 Question of is there a way to resolve problems or at least discuss them in a rational way o What does it mean to have

October 1 Lecture - October 1 2012 Question of is there a...

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October 1, 2012 Question of is there a way to resolve problems or at least discuss them in a rational way o What does it mean to have a preference ordering? Why should preferences be transient? o What if there are tradeoffs? Different aspects of the choices so that the same option doesn’t necessarily embrace the best option, chose among goals but choosing among options o Aspects of choice you care about eliminate infeasible or dominated options and then think of remaining in terms of tradeoffs *Compensating differential helps when thinking about tradeoffs; translate all things into money (how much pay for advantage or pay to suffer disadvantage) helps compare incomparable units/dimensions (which improvement is bigger than a dis-improvement) Franklin’s Algebra : see which values are equal and cross them out of the equation o What if we can extend principle of compensating differentials? How much of Ann’s welfare should we sacrifice to get better for Bob’s? When evaluative dimensions are well-being of different people, can use same techniques: it regards every persons’ welfare as a dimension, cross out infeasible options and
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  • Fall '11
  • Kleiman
  • pareto, Kaldor-Hicks efficiency, potential Pareto improvement

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