I wish I understood this post better. I get the sense that there are relevant economic intuitions I’m missing. Particularly when trying to understand this sentence:
It’s true at each point that you wouldn’t be helping her by preventing her from making the trade, but focusing on that aspect of the situation makes one a price-taker in a case where that attitude doesn’t actually unlock any value.
I don’t really understand the claim here (but it does seem like an interesting claim is being made and I’d like to understand it), mostly because I don’t understand the way you’re using the term “price-taker,” and following the link didn’t really clarify things for me.
Somewhat separately, it would be good for someone to write a straightforward expository LW post on rents and rent-seeking, with applications to understanding why everything is terrible.
Qiaochu, your comment here is good example of a clear request for a limited amount of interpretive labor. This was really easy to know how to respond to. I want to praise the good here and not just cast shade on the bad.
Thanks for helping me see where the post was hard to understand :)
Some economic models assume you’re negligible in size compared to the market, and can basically only buy and sell things, so you can treat prices as constants. This is being a price-taker, you take prices as you find them. (By contrast, in monopoly situations, your decisions are one whole side of the supply-demand balance.)
The question of whether it would be a good idea to prevent desperate people from making unpleasant tradeoffs is just not a very interesting question on the merits (except as a proxy for some underlying political question).
The trade intuition can be an alluring enough subset of the world that refusing to engage with it at all in some contexts (treating them as sacred and beyond tradeoffs) may be psychologically necessary to engage with other frames. It’s not just valuable as a preventative, it’s can enhance specific kinds of cognition, just like drugs that turn off some particular part of the brain that interfere with other parts’ function.
The question of whether it would be a good idea to prevent desperate people from making unpleasant tradeoffs is just not a very interesting question on the merits (except as a proxy for some underlying political question).
It’s focusing on the aspect of the problem where we can’t do much to help. It’s important to think through once in order to notice that it’s actually pretty confusing to imagine someone really holding the affirmative position in good faith. But, then, one moves on.
I wish I understood this post better. I get the sense that there are relevant economic intuitions I’m missing. Particularly when trying to understand this sentence:
I don’t really understand the claim here (but it does seem like an interesting claim is being made and I’d like to understand it), mostly because I don’t understand the way you’re using the term “price-taker,” and following the link didn’t really clarify things for me.
Somewhat separately, it would be good for someone to write a straightforward expository LW post on rents and rent-seeking, with applications to understanding why everything is terrible.
Qiaochu, your comment here is good example of a clear request for a limited amount of interpretive labor. This was really easy to know how to respond to. I want to praise the good here and not just cast shade on the bad.
Thanks for helping me see where the post was hard to understand :)
Some economic models assume you’re negligible in size compared to the market, and can basically only buy and sell things, so you can treat prices as constants. This is being a price-taker, you take prices as you find them. (By contrast, in monopoly situations, your decisions are one whole side of the supply-demand balance.)
In a price-taker situation, the goods offered for sale and the prices they’re offered at are taken as givens, even if there’s imperfect information. Things that aren’t considered include negotiation with counterparties, interfacing directly with physical (or social) reality to configure it into states you like that aren’t well-approximated by anything currently for sale, or coordinating with other agents in your position to change the overall dynamic.
The question of whether it would be a good idea to prevent desperate people from making unpleasant tradeoffs is just not a very interesting question on the merits (except as a proxy for some underlying political question).
The trade intuition can be an alluring enough subset of the world that refusing to engage with it at all in some contexts (treating them as sacred and beyond tradeoffs) may be psychologically necessary to engage with other frames. It’s not just valuable as a preventative, it’s can enhance specific kinds of cognition, just like drugs that turn off some particular part of the brain that interfere with other parts’ function.
Does any of that help?
Yep, thanks! This was very clear to me:
This was less clear to me:
What makes it not very interesting?
It’s focusing on the aspect of the problem where we can’t do much to help. It’s important to think through once in order to notice that it’s actually pretty confusing to imagine someone really holding the affirmative position in good faith. But, then, one moves on.