| > I'd say it's pretty standard for economists to consider public perception (brand value) to be part of the decision-making model. In fact, it's essential - plenty of decisions can't be explained rationally unless you account for intangible assets and revealed preferences. Interesting, I was under the impression that this was sort of the bold new frontier for behavioral economics. I would agree that plenty of decisions can't be explained rationally without accounting for intangible (non-price/revenue driven) effects, but hadn't realized that the specifics were widely accepted by "traditional" economists. I also, myself, am skeptical of revealed preferences (specifically whether or not they can be revealed with respect to ordinality). But perhaps it is now widely accepted? > Likewise, it's common for non-economists to think of government regulation as an exogenous force but from an economic perspective, government action is very much a component of the market - it exists as part of the market, not outside it. Oh gosh, its been awhile, so my command of the proper terminology and referencing is severely lacking. But I agree with what you are saying...what I was trying to (poorly) articulate was that in a non-regulated, laissez faire market involving only Suppliers and Consumers (Demand) without an external correcting force acting on the market the market outcome would be inefficient. Of course from an economic model standpoint, the "new" market incorporates the regulation...and the government is actually an actor within the market. My lax terminology is probably a result of a) not being an economist first and foremost and b) usually having politically oriented discussions with individuals who like to call Right-wing economic view points "capitalism". > This is a common talking point among advocates of wage floors (e.g. 'minimum wage') Well, truth be told, I am not a fan of wage floors...I am more a proponent of basic income. And Labor economics is definitely complicated and the actual economics usually aren't the basis for the political positions (at least as I understand it)...but one rather contrived example which stuck with me was: If you are a company selling a $10 good, which market would you prefer: 100 potential buyers with $10 each or 1 buyer with $901 and 99 with $1? Which is what motivated that last comment...which is rather narrow and analysis thereof far above my own narrow view of economic theory. It just resonated with me. |