Category Archives: Economics

DECISION TREES FOR PATIENTS.

DECISION TREES FOR PATIENTS. Laura Landro’s review describes how Doctors Groopman and Hartzband “examine a formula for rational decision-making often used in economics: Measure the probability of an outcome and place a numerical value on the outcome itself.” The probable … Continue reading

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DECIDING WHAT KIND OF PATIENT YOU ARE.

DECIDING WHAT KIND OF PATIENT YOU ARE. Jerome Groopman (an oncologist) and Pamela Hartzband (an endocrinologist) have written YOUR MEDICAL MIND, which analyzes the role of patient choices in medical decisions. (I have relied on this review by Daniel J. … Continue reading

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A VOTE FOR THE INVENTION OF AGRICULTURE BEING A GOOD THING.

A VOTE FOR THE INVENTION OF AGRICULTURE BEING A GOOD THING. In her article, Elif Batumen raises the argument Jared Diamond makes that the invention of agriculture was “the worst mistake in the history of the human race”—responsible for “the … Continue reading

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DID BEER LEAD TO THE INVENTION OF AGRICULTURE?

DID BEER LEAD TO THE INVENTION OF AGRICULTURE? I had a conversation recently with my friend Don Warfield in which he told me about the archaeological theory that hunter gatherers turned to agriculture because of beer. This article describes the … Continue reading

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SELLING GOODS IN THE SHADOW MARKET.

SELLING GOODS IN THE SHADOW MARKET. In the shadow market, the biggest flow of goods is from China, but large American companies like Procter & Gamble make their products available to these markets through local distributors. Neuwirth explains how the … Continue reading

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THE SECOND BIGGEST ECONOMY IN THE WORLD—THE UNDERGROUND ECONOMY.

THE SECOND BIGGEST ECONOMY IN THE WORLD—THE UNDERGROUND ECONOMY. The untaxed, unlicensed, and unregulated economies of the world collectively would be the second largest economy in the world, after the United States. That estimate comes from an interview in Wired … Continue reading

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KLUDGES.

KLUDGES. The title of the sunk cost article refers to sunk costs as a “memory kludge”. This wikipedia article defines a kludge as: “A kludge (or kluge) is a workaround, a quick-and-dirty solution, a clumsy or inelegant, yet effective, solution … Continue reading

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WHEN ARE SUNK COSTS SUNK?

WHEN ARE SUNK COSTS SUNK? Although the article by Baliga and Ely presents its arguments as an exception to the long-established rule that it is rational to treat sunk costs as by-gones, I think it is easier to view the … Continue reading

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AN ARGUMENT THAT SOMETIMES IT’S RATIONAL TO BE INFLUENCED BY SUNK COSTS.

AN ARGUMENT THAT SOMETIMES IT’S RATIONAL TO BE INFLUENCED BY SUNK COSTS. The Baliga and Ely article struck me because it presents an interesting argument that there can be circumstances where you should be influenced by sunk costs. The argument … Continue reading

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WHY SUNK COSTS SHOULD BE IGNORED.

WHY SUNK COSTS SHOULD BE IGNORED. Kids, you have probably encountered the the economic argument that it is a fallacy to take sunk costs into consideration in making a decision (“sunk costs” are defined in this wikipedia article as “retrospective … Continue reading

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