Tag Archives: utility maximization

The neoclassical foundational assumption of rational maximization and Buchanan's rational choice theory are "thin" theories of the actor. As a result the models created on the basis of such assumptions are simplifications. The questions is whether they are oversimplifications. That depends on the case. Such assumptions may apply generally in certain simple cases but not to all. Moreover, the assumption of methodological individualism on which microfoundations depends is similarly limited....

Fun.Lars P. Syll's BlogOn Econs and HumansLars P. Syll | Professor, Malmo University

Yet there’s a logic — however absurd — to it. It’s a case of income maximization gone extreme. Repealing healthcare will maximize incomes for healthcare providers, Congressmen, lobbyists, pharmaceutical companies. And repealing healthcare will maximize incomes for households, by lowering taxes. Never mind that it shrinks life expectancy, which is to say: never mind the long-term benefits of such investments — in this paradigm, all that matters is income, right now. Thus, the overarching...

At some point, everyone reaches a crossroads in life: Do you decide to take that job and move to a new country, or stay put? Should you become a parent, or continue your life unencumbered by the needs of children? Instinctively, we try to make these decisions by projecting ourselves into the future, trying to imagine which choice will make us happier. Perhaps we seek counsel or weigh up evidence. We might write out a pro/con list. What we are doing, ultimately, is trying to figure out...