Econ Bros report in!

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Anonymous Tue Apr 5 00:08:18 2011 No.2833434 [Reply] [Original]

Econ Bros report in!

>>	Anonymous Tue Apr 5 00:10:18 2011 No.2833439 Doctoral candidate here, reporting in.

>>	EconGuy !!d2Pzyp675d3 Tue Apr 5 00:11:18 2011 No.2833445 Undergrad econ bro reporting in! >finite uthenery

>>	resident /sci/ economist Tue Apr 5 00:15:18 2011 No.2833463 Resident Sci Economist here. Wow its like we are all on /sci/ at the same time or something. I go to Arizona State, where do you guys study?

>>	Anonymous Tue Apr 5 00:20:18 2011 No.2833482 just watched Vaclav Smil give a talk about a ton of interesting shit, from economics to environmental issues and epidemics http://www.youtube.com/watch?v=678b7N0pIHE Teaches in Canada too :}

>>	brazilconomist Tue Apr 5 00:20:18 2011 No.2833483 brazilfag here, UFRJ i'd like to know moar about that "experimenting with macroeconomic theories" from econguy >captcha: derrient Business indeed...

>>	Anonymous Tue Apr 5 00:22:18 2011 No.2833490 under grad Econ bro here reporting in! Hello fellow bros/gals!

>>	Anonymous Tue Apr 5 00:23:18 2011 No.2833498 Econ fag here. We need an /econ/ board

brazilconomist Tue Apr 5 00:24:18 2011 No.2833505

>>2833445

btw econguy, i was in the other shitstorm thread, asking you about this:

>Personally, I am exploring a potential means of >testing macroeconomic theories and policies on a >limited scale.

this is what im talking about. no need to come out of your anonimity if it makes you uncomfortable. but if you just gave me uni name i could keep an eye out for any papers

>>	Anonymous Tue Apr 5 00:25:18 2011 No.2833511 What up, bitches. Econfag here. about 2/3 done with undergrad, hoping to get into a good grad school afterwards. whats everyones interests in the field?

>>	Anonymous Tue Apr 5 00:28:18 2011 No.2833524 lets say the demand for a good shifts down, why does the price go down?

>>	Anonymous Tue Apr 5 00:29:18 2011 No.2833526 >>2833505 Yeah, I am working on it as my thesis right now, though it is in very early stages. pop an email to econguy@live.com. I am heading to bed, but perhaps we can talk later.

resident /sci/ economist Tue Apr 5 00:29:18 2011 No.2833527

>>2833511

Im about as far as you in my undergrad too.

I think since studying economics Ive developed an interest in environmental and health policy. Im taking a health care economics class taught by an economist psychiatrist. Its super interesting.

Anyway, but I dont want to go to grad school, I just want to get in a business and work on operations and stuff.

What about you guys

>>	Anonymous Tue Apr 5 00:29:18 2011 No.2833531 >>economics sage this shit, economics is shit tier

>>	Anonymous Tue Apr 5 00:30:18 2011 No.2833535 >>2833524 Because the average consumer isnt willing to pay as much as they used to.

>>	Anonymous Tue Apr 5 00:32:18 2011 No.2833541 >>2833524 Demand goes down, suppliers lower price to maximize profit.

>>	Anonymous Tue Apr 5 00:32:18 2011 No.2833546 Accounting bro here, you econ guys are alright with me. Finance guys are cool too.

>>	EconGuy !!d2Pzyp675d3 Tue Apr 5 00:33:18 2011 No.2833551 >>2833531 stfu haterfag, Help get us a Finance/Econ board and everyone will be happy.

Anonymous Tue Apr 5 00:34:18 2011 No.2833555

>>2833541
no that assumes the producer has market power to affect price

a shift down in the demand curve means a lower quantity is demanded overall which means producers are going to produce less, which means their costs will go down??? which means they can afford to lower price?

some explain the cause and effect plz

>>	Anonymous Tue Apr 5 00:34:18 2011 No.2833556 Chem major here- When did all the business school people start Fagging up my /sci/

>>	Anonymous Tue Apr 5 00:35:18 2011 No.2833560 >>2833551 HURR DEEERP while i am finding a cure for cancer you will be exploiting the underprivileged, so you are fucking filth and your major is bullshit gtfo 4chan you scum

>>	EconGuy !!d2Pzyp675d3 Tue Apr 5 00:35:18 2011 No.2833561 >>2833541 Its a bit more complicated than that, but you get the idea.

>>	Anonymous Tue Apr 5 00:35:18 2011 No.2833562 Finance/Math double major reporting in Was going to do Economics, but am doing Finance because it seems to me that it has better employment opportunities in case I can't into trading.

>>	Anonymous Tue Apr 5 00:35:18 2011 No.2833568 >>2833527 I'm into macro for the most part. In school its all AD/AS and IS/LM models and in my spare time I look into the Austrian approach.

>>	brazilconomist Tue Apr 5 00:36:18 2011 No.2833572 >>2833526 off you go then, ill mail you brah, keep up the work on that thesis >>2833527 im almost half done with my undergrad, and for now i'm looking forward for an internship on one of the few banks i was called to.

Anonymous Tue Apr 5 00:37:18 2011 No.2833579

http://www.forbes.com/2008/06/18/college-majors-lucrative-lead-cx_kb_0618majors.html

>Meanwhile, the economics, finance and math majors are pursing jobs with salaries that often double once they've gotten some decent experience under their belts.

>"The kinds of majors where you learn to integrate mathematics and science with the everyday world have a tremendous benefit in terms of earnings potential," says PayScale.com's Lee. These include economics, engineering, finance and mathematics.

http://www.roosevelt.edu/cas/econ/whymajorinecon.htm

>According to the US Department for Labor, “Employment of economists and market and survey researchers is expected to grow faster than the average for all occupations through 2010.”

http://www2.csusm.edu/rarnold/economics_major.htm

>A few years ago BusinessWeek magazine asked the chief executive officers (CEOs) of major companies what they thought was the best undergraduate degree. Their first choice was engineering. Their second choice was economics. Economics scored higher than business administration.

>>	EconGuy !!d2Pzyp675d3 Tue Apr 5 00:38:18 2011 No.2833586 >>2833568 Austrian economics is quite interesting. You may consider checking out the Mises institute during the summer. I dont know too much about it myself, but it is worth looking into.

>>	Anonymous Tue Apr 5 00:38:18 2011 No.2833588 >>2833560 deal with it nerd. No cure will ever be "discovered" for cancer. Way too much money involved.

>>	Anonymous Tue Apr 5 00:39:18 2011 No.2833590 >>2833439 Have fun wrecking the economy while I solve the global energy crisis.

>>	Anonymous Tue Apr 5 00:39:18 2011 No.2833595 >>2833560 Thats a terrible argument. You like econ, therefore you most exploit people. Well then, you like chemistry therefore you most like to build chemical weapons and kill innocents. cool argument huh?

Anonymous Tue Apr 5 00:40:18 2011 No.2833596

>>2833579

>>implying that means anything

This is the problem with business students, they don't know how to think for themselves so they just exploit what they can to get what they want.

Ehh, take this faggot here I am referencing quoting journals and newspapers written by no-name people and then proclaiming his major is superior because someone said it was

>>	Anonymous Tue Apr 5 00:41:18 2011 No.2833600 >>2833595 The whole reason economics was founded was to exploit the poor so the rich can amass wealth, this is capitalism faggot. Chemistry was founded to understand the world, not to exploit it

>>	Anonymous Tue Apr 5 00:41:18 2011 No.2833603 >>2833588 >>money & cancer in the same sentence thisiswhywecanthavenicethings.bitmap

>>	Anonymous Tue Apr 5 00:42:18 2011 No.2833605 >>2833590 Alternatives will proliferate, and self absorbed assholes such as yourself will develop these technologies, as is expected.

>>	Anonymous Tue Apr 5 00:42:18 2011 No.2833609 >>2833439 >>Dr & Economics LAUGHINGGGIRLS.jpg

>>	Anonymous Tue Apr 5 00:42:18 2011 No.2833612 >>2833600 Your ignorance is incredible. >notsureiftrollorjustreallystupid.jpg

>>	Anonymous Tue Apr 5 00:44:18 2011 No.2833621 >>2833600 yep Adam Smith was a cruel tyrant, he wanted to enslave the working class. Likewise, Karl Marx was just trying to exploit workers.

Anonymous Tue Apr 5 00:44:18 2011 No.2833624

>>2833600

I dont think there is inherently evil about chemistry or economics, but there is something kind of funny to me imagine Adam Smith sitting around marveling at labor efficiency, and then some chemist making poison gas for warfare.

With that said I dont think anyone has used economics principals for malevolence. Maybe financial principals, but thats different.

>>	Anonymous Tue Apr 5 00:44:18 2011 No.2833625 File: 17 KB, 240x249, Yall_niggas_umad.jpg [View same] [iqdb] [saucenao] [google]

>>	Anonymous Tue Apr 5 00:45:18 2011 No.2833630 >>2833586 I wish I could attend their conference they do over the summer, but I will be busy. In the mean time I am studying Man, Economy, and State by Rothbard on my own. Time and Money by Roger Garrison is great on business cycle theory as well.

>>	Anonymous Tue Apr 5 00:45:18 2011 No.2833631 Have fun moving money around while us chem-fags and engineer-fags contribute to humanity.

>>	Anonymous Tue Apr 5 00:46:18 2011 No.2833635 I seriously wish anyone under the age of 18, and not in college was not allowed on this board.

>>	brazilconomist Tue Apr 5 00:46:18 2011 No.2833638 >>2833621 stop feeding the troll dude. just let him say whatever the fuck he wants

>>	Anonymous Tue Apr 5 00:48:18 2011 No.2833647 File: 300 KB, 1536x1152, 1301955907144.jpg [View same] [iqdb] [saucenao] [google]

>>	Anonymous Tue Apr 5 00:48:18 2011 No.2833648 File: 47 KB, 400x300, 1284422669299.jpg [View same] [iqdb] [saucenao] [google] >>2833625 I aint even mad bro. Aint even mad

Anonymous Tue Apr 5 00:48:18 2011 No.2833649

Doing econ assignment, come onto /sci/, epic econ thread..

So whattya guys think?

1) Does a perfectly competitive firm have no rival?

2) Is a perfectly competitive equilibrium a dominant strategy equilibrium?

3) Is that equilibrium a Nash equilibrium?

1) Not true, a perfectly competitive firm has infinite rivals.

2) Don't think so, but this is a hard question. There is zero deadweight loss, but a firm could do just as well by not entering into a perfectly competitive market.

3) It is a Nash equilibrium however, no argument here...

Any thoughts on these three questions? I have a few more if people like to contribute..

>>	Anonymous Tue Apr 5 00:49:18 2011 No.2833652 When was the last time you saw a chemist or engineer on a major news network being asked their opinion on something important? No one wants to talk about chemistry and physics, everyone is interested in the Economy and how it works. why u mad tho

>>	Anonymous Tue Apr 5 00:49:18 2011 No.2833656 >>2833649 phrases in economics piss me the fuck off HURR DURR NASH EQUILIBRIUM YOU SOUND LIKE A FUCKING FAGGOT

>>	Anonymous Tue Apr 5 00:50:18 2011 No.2833661 >>2833652 When was the last time you saw a Pharmaceutical drug on TV? Now stfu. Exploiting the natural world > Moving money

>>	resident /sci/ economist Tue Apr 5 00:51:18 2011 No.2833663 >>2833649 Whoa I dont even know what nash equilibirum is. But your answer for #1 is true.

>>	Anonymous Tue Apr 5 00:52:18 2011 No.2833667 File: 22 KB, 400x280, fBljC.jpg [View same] [iqdb] [saucenao] [google] Holy fuck a moneyfag thread. Fortuitous, just started another thread about bitcoin. Any opinions from the ivory tower?

>>	Anonymous Tue Apr 5 00:53:18 2011 No.2833678 >>2833661 moving money matters if stupid pharmaceuticals are ripping people off with bad drugs...then we gotta move money away from them good companies making efficient choices, move money towards them

>>	Anonymous Tue Apr 5 00:54:18 2011 No.2833681 >>2833663 http://academicearth.org/lectures/nash-equilibrium

>>	resident /sci/ economist Tue Apr 5 00:56:18 2011 No.2833695 File: 3 KB, 209x215, 1275169228767l.png [View same] [iqdb] [saucenao] [google] >>2833678

Anonymous Tue Apr 5 00:56:18 2011 No.2833697
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>>2833635

Ph.D candidate in Physics. Economics is interesting. Way more of a science than any Liberal arts, Psych, and Political Science.

Anyways, I wanted to point out to you that economics is the reason why we're able to wait in line for a cup of coffee dumbfag. So many sci majors bashing each other, when it's obvious you don't know shit about economics so you just get mad like a bitch.

Anonymous Tue Apr 5 00:56:18 2011 No.2833698

>>2833649

i hate mainstream micro theory. There is no such thing as perfect competition and studying it, I believe, doesn't give one any real insight into how people act. Most of micro, when it is all mathematicalized, if i can coin such a word, is completely fallacious.

resident /sci/ economist Tue Apr 5 00:58:18 2011 No.2833709

>>2833698

Im at the intermediate level of micro economics.

Perfect competition is one of many unreal examples, knowing a large collection of unrealistic scenarios gives you a good idea on how to look at realistic scenarios which resemble the unrealistic ones. Thats what I think anyway.

>>	Anonymous Tue Apr 5 00:59:18 2011 No.2833711 >>2833649 Alright bros, number 1 and 3 are correct, however I would like to say more about those answers... However, number 2 i'm fuuuuuuuuuuuucking confused. Actually i'm not confused I just don't know the fucking answer... Any thoughts?

>>	Anonymous Tue Apr 5 00:59:18 2011 No.2833714 >>2833695 markets aren't efficient they dont regulate themselves or make efficient outcomes we gotta do that

>>	Anonymous Tue Apr 5 01:01:18 2011 No.2833722 >>2833714 completely wrong. an unhampered market, that respects property rights, does exactly that.

>>	Anonymous 2.0 Tue Apr 5 01:04:18 2011 No.2833737 >>2833714 On the contrary, markets and social pressures end up changing and often regulating businesses without the point of a gun from you know who.

Anonymous Tue Apr 5 01:05:08 2011 No.2833738

Okay nubby nubs. Perfect competition is what happens when the number of firms ---> infuckingfinity.

Also, monopoly is the case where the number of firms -------> 0 (or 1, if you're stupid)

Oligopoly (THE MOST IMPORTANT ONE) is any mix of the two.

Since we live in a continuous world, the odds of us studying a market type precisely is exactly ZERO. But we can conclude from calculus that every market will behave somewhere in between monopoly and PC. Oligopoly attempts to study a market type exactly, and is the most relevant market today.

So anyways, it all makes sense, and don't be ignorant to PCM. Know what it means, it's implications, and understand why it's important. It's not "irrelevant" in the world today niggers.

brazilconomist Tue Apr 5 01:05:18 2011 No.2833740
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>>2833697

yup. he mad cause he doesn't understand Game Theory. wich by the way is a DISCRETE MATH topic

>>2833698

i agree with you. micro is based on the whole "rational agents" hipothesis, and it stinks sometimes. but i also ask myself: is there any other way we can try to give form to agents' behaviour?

also, if this other way comes up, we'll always have this whole micro theory to compare.

Anonymous Tue Apr 5 01:12:18 2011 No.2833769
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>The U.S. has unrecorded debt of $75 trillion, or close to 500 percent of gross domestic product, counting what it owes on its bonds plus obligations for Social Security, Medicare and Medicaid, Gross wrote in his monthly investment outlook. The U.S. will experience inflation, currency devaluation and low-to- negative interest rates after accounting for consumer-price gains if it doesn’t reform its entitlement programs, he said.

>mfw when econfags are going to get lynched when america goes up in a ball of fire.

>>	Anonymous Tue Apr 5 01:13:18 2011 No.2833773 A perfectly competitive equilibrium is a dominant strategy equilibrium. Is this true, or false?

Anonymous Tue Apr 5 01:13:18 2011 No.2833775

>>2833740

> is there any other way we can try to give form to agents' behaviour?

Ludwig Von Mises coined the term praxeology as a means to studying how humans behave in a market. I think the Austrian methodology gives much more insight into how the world actually works then the physics-wannabe-economics of today. All the indifference curves, utility functions and mathematical models are fallacious.

Give it a peak, still learning myself

>>	Anonymous Tue Apr 5 01:15:18 2011 No.2833785 >>2833722 Oh yeah, Greenspan tried out this unhampered efficient market thing, and it turned out great.

>>	Anonymous Tue Apr 5 01:15:18 2011 No.2833787 File: 75 KB, 604x453, ClassicTF.png [View same] [iqdb] [saucenao] [google] >>2833769 >mfw economists will all be billionaires and have statues erected in their names when they fix America's debt.

>>	Anonymous Tue Apr 5 01:17:18 2011 No.2833796 File: 22 KB, 479x480, 1274388042485.jpg [View same] [iqdb] [saucenao] [google] >>2833785 >thinks the existence of a central bank still makes it a free market >mfw

Anonymous Tue Apr 5 01:17:18 2011 No.2833798

>>2833714

Very often they are reasonably efficient. There are examples of market failures, and in those events, I think its the governments responsibility to step in WHEN companies fail to correct themselves and their industries.

And companies can do a very good job at correcting themselves. If you are a company, and you are considering becoming better for the environment there are a number of reasons to

1. The customer might want a greener product
2. by becoming greener in some regards (emphasis on some regards), you are reducing waste, increasing efficiency, and over all lowering costs.
3. If the company doesnt become green now, they will become green when the government gets pissed off enough and enforces a bunch of impossible to meet requirements and in general fucks up the whole operations of my company.

Anonymous Tue Apr 5 01:18:18 2011 No.2833803

>>2833737
>>2833722

no, some markets create externalities that put costs on the public and no costs on the market itself

or when businesses collude and create cartels, what then?

or when they merge into one conglomerate and have monopoly power?

so what then?
that's why we need anti-trust laws because competition naturally becomes one-sided...the weak get destroyed and the powerful exploit the masses

and that's why we have environmental laws, because factories don't care if they pollute the air and lakes...it's not part of their production cost

and holding them liable for such externalities is another way to regulate them...

>>	Anonymous Tue Apr 5 01:19:18 2011 No.2833806 Engineer here. Which one of you fags wants to do this time value of money assignment for my mandatory economics course? This bullshit gives me a headache.

>>	Anonymous Tue Apr 5 01:19:18 2011 No.2833808 >>2833663 As an actual economist who knows that Nash equilibrium is a topic that's covered in any second-year micro course, I demand you stop calling yourself an economist.

>>	Anonymous Tue Apr 5 01:19:18 2011 No.2833809 >>2833787 An idiot can solve americas debt. Decrease spending Increase taxes on rich people. >Hurr

>>	Anonymous Tue Apr 5 01:22:18 2011 No.2833819 >>2833796 then what's the point of saying how things would work in a fantasy world? Without a central bank your fictitious efficient market will be causing out of control deflation and depression.

>>	Anonymous Tue Apr 5 01:22:18 2011 No.2833820 >>2833769 >>The U.S. has unrecorded debt of $75 trillion, or close to 500 percent of gross domestic product, ... That cant be true... can it? Whats the source on this? The implications just made my head spin if thats true.

resident /sci/ economist Tue Apr 5 01:22:18 2011 No.2833822

>>2833803

The capacity for a cartel of ogliopoly is limited to certain industries. There will never be a monopoly on crackers for example.

Externalities should be handled by the government in the event a company of industry fails to correct it themselves. At that point the industry looks like a bunch of retards when the government has to mop up their shit. I believe it is in industry's and company's interests to get their act together BEFORE the government steps in. Because once the government steps in, they are going to fuck up everything.

In reality I think our government is doing a poor job at holding unethical companies accountable for the damages they do.

Anonymous Tue Apr 5 01:22:18 2011 No.2833824

>>2833649
Perfect competition is a dominant strategy equilibrium and hence a Nash equilibrium. It is dominant in that one choice is always best - here, choosing to sell at the competitive price. If you choose a higher price, Q=0, if you choose lower, you're losing money on each unit.

A dominant strategy equilibrium is Nash because trivially nobody has incentive to deviate from their dominant strategy in any circumstance.

Anonymous Tue Apr 5 01:23:18 2011 No.2833826

>>2833773
>>2833808

If you're an actual economist then discuss this statement please.

I am leaning towards yes, a PC eqm is a DSE (dominant strategy equilibrium). It's also Pareto optimal, and I suppose that would make an an NE (Nash eqm) also... Discuss please.

>>	Anonymous Tue Apr 5 01:23:18 2011 No.2833828 >>2833819 >Without a central bank your fictitious efficient market will be causing out of control deflation and depression. but why?

>>	Anonymous Tue Apr 5 01:23:18 2011 No.2833829 >>2833775 Implying that I haven't read Hayek or Mises. HERR.

>>	resident /sci/ economist Tue Apr 5 01:23:18 2011 No.2833833 >>2833808 I dont want to. I usually use this name when talking to people who dont know anything about economics. Also, I make it pretty clear very often that I am an undergrad.

>>	Anonymous Tue Apr 5 01:24:18 2011 No.2833835 File: 154 KB, 995x634, 1299849463376.jpg [View same] [iqdb] [saucenao] [google] >>2833820 http://www.bloomberg.com/news/2011-03-31/bill-gross-says-u-s-debt-has-little-value-echoes-buffett-3- .html

Anonymous Tue Apr 5 01:24:18 2011 No.2833836

>>2833803
I'll make this short because I am going to bed.

While firms would have the ability to form cartels or "monopolies", they would be very unstable. For example, if a firm was buying out all compition to form a monopoly, then people would have the incentive to get into the business, so the dominant firm would buy them out. The firm cannot keep buying out competitors and it wouldn't work.

If the firms only cooperate to restrict production and raise their prices then the firms participating have an overwhelming incentive to cheat on their agreement and the cartel would eventually collapse.

As for the enviromnetal problems you mentioned, these arise because there isn't property rights in those areas. Essentially the government owns rivers, lakes, oceans, air, ect.

Anonymous Tue Apr 5 01:25:18 2011 No.2833841

>>2833824

What about if a firm decides to leave the market and still make zero profit? Ohhhhhh then the price will increase and all the other firms will gain profit!!! Then the firm would be like "shit i should not have left", right? They would say that, word for word, right????????

>>	Anonymous Tue Apr 5 01:26:18 2011 No.2833843 >>2833822 Agreed. I think some businesses love colluding with government because they then have the legal power to justify a monopoly. Example: In Texas they mandate everyone to have car insurance; car insurance agencies profit.

>>	Anonymous Tue Apr 5 01:27:18 2011 No.2833852 >>2833836 >he argues in favor of free markets on 4chan. wrong site to do that bro, although i completely agree with you.

Anonymous Tue Apr 5 01:28:18 2011 No.2833853

>>2833836

they are unstable because of legalities and because people like to cheat...

but they can also be stable and totally predatory and destructive

there is no reason why "letting a market regulate itself" makes any sense or creates efficient outcomes

this is like saying the human body should regulate itself because "invisible hand" or someshit

makes 0 sense in reality, its all idealistic rubbish

Anonymous Tue Apr 5 01:28:18 2011 No.2833855

>>2833841
Any individual firm sells measure zero of total quantity in perfect competition, hence their exiting the market does not affect price. Even if it did, they do not care whether the other firms enjoy profits or not. If the actual outside option is zero, then setting the competitive price is only weakly dominant, but there's a good case to be made that leaving the industry is costly in some sense - e.g. I own specialized capital.

>>	Anonymous Tue Apr 5 01:30:18 2011 No.2833858 >>2833853 name me a predatory company or cartel that isn't helped in some way by the existence of a state

>>	Anonymous Tue Apr 5 01:30:18 2011 No.2833859 >>2833853 destructive how? explain your statements. and the analogy to the human body makes no sense. The economy is no way like a human body.

>>	Anonymous Tue Apr 5 01:31:18 2011 No.2833861 >>2833836 >Empirical studies of 20th century cartels have determined that the mean duration of discovered cartels is from 5 to 8 years. However, one private cartel operated peacefully for 134 years before disbanding. wikipedia

>>	Anonymous Tue Apr 5 01:32:18 2011 No.2833863 >>2833836 What kind of BS is this? Are you an economist in some lala land with zero business sense?

>>	Anonymous Tue Apr 5 01:32:18 2011 No.2833865 >>2833861 which cartel?

>>	Anonymous Tue Apr 5 01:32:18 2011 No.2833866 >>2833852 I disagree, I think this is a great place to do so. People need to hear it.

Anonymous Tue Apr 5 01:33:18 2011 No.2833869

>>2833859

destructive as in creating fake shortages of goods, inflating prices, harming society, harming the poor, etc

there's no such thing as a free-economy, so nothing we say has any empirical backing

but it's obvious from the behavior of companies in mixed-economies that we have to regulate them, and regulate them quite hard.

>>	Anonymous Tue Apr 5 01:34:18 2011 No.2833872 >>2833863 Where exactly was I wrong?

>>	Anonymous Tue Apr 5 01:35:18 2011 No.2833879 fuck this, im fapping then going to bed. night guise

Anonymous Tue Apr 5 01:36:18 2011 No.2833880

look at the financial industry, it's way ahead of the regulators and what happens?

lack of regulation allowed them to over-leverage, over-expose themselves and essentially run a casino with complex derivatives

this then lead to system risk and a failure of the system...

Anonymous Tue Apr 5 01:36:18 2011 No.2833884

>>2833869
the problem with your argument is that the government regulations distort the market and often cause more problems than they solve, giving some companies advantages over others, causing mal-investments, and then blaming the problems they created on the free market.

vicious cycle, and to someone who doesn't have an understanding of what a real free market is, they believe regulation is an obvious necessity.

>>	Anonymous Tue Apr 5 01:37:18 2011 No.2833885 companies only care about their profit margin they don't care about fairness, society, or environment this is why we need regulation just like how we need laws to regulate behavior

>>	Anonymous Tue Apr 5 01:38:18 2011 No.2833888 How do you create an economy where everyone is a millionaire?

Anonymous Tue Apr 5 01:38:18 2011 No.2833889

>>2833884

yes but that is due to bad regulation

regulation isn't inherently good or bad, it depends how its written and how it works.

obviously we need good regulation. bad regulation is usually written to serve the interests of the businesses not the people.

we simply need regulation that serves the people.

>>	Anonymous Tue Apr 5 01:39:18 2011 No.2833893 >>2833888 Inflate like mad?

Anonymous Tue Apr 5 01:39:18 2011 No.2833894

>>2833885

Profit and society arent mutually exclusive interests. The reason companies make money is because they are providing something the consumer wants. If the consumer wants a more ethical service, its in the interest of the company to provide it. I think companies (like wal mart surprisingly) at the moment are moving to become more green because they know that is what the consumer wants.

>>	Anonymous Tue Apr 5 01:40:18 2011 No.2833896 i don't understand why mutual exchanges between two consenting parties needs regulated by the government. That's all capitalism is.

>>	Anonymous Tue Apr 5 01:43:18 2011 No.2833902 >>2833885 the incentive of profit is the beauty of capitalism. It allows for greater innovation, greater efficiency, and the lesser use of resources. It's the only reason your standard of living is so high.

Anonymous Tue Apr 5 01:48:18 2011 No.2833912

>>2833896

Because sometimes they have externalities that are to the disadvantage of third parties (pollution).

Also, sometimes the industries are running at a natural inefficiency, that would be for the benefit of the general public if they were fixed (healthcare).

Anonymous Tue Apr 5 01:49:18 2011 No.2833916

>i don't understand why mutual exchanges between two consenting parties needs regulated by the government. That's all capitalism is.

we already went over this
because we care about "fairness" and "society"
because businesses create many negative externalities

because monopoly power imbalances markets and can lead to inflation, false shortages, poverty, low wages, poverty, etc

because companies can get "too big too fail" in which case we need regulation to keep them smaller or less systemic...

Anonymous Tue Apr 5 01:51:18 2011 No.2833920

>>2833902
>the incentive of profit is the beauty of capitalism. It allows for greater innovation, greater efficiency,

this isn't even true anymore

profit can be acquired with no innovation = finance

all they do is create new techniques to move money around and bet on stocks....nothing of value is produced

stock markets don't even reflect the value of the product they are either inflated or deflated by artificial speculation

capitalism might have been productive before, but it isn't inherently productive.. not at all

>>	Anonymous Tue Apr 5 01:53:18 2011 No.2833926 Econ minor here. Taking History of Economic Thought & Comparative Economic Systems from the same prof at the same time.

>>	Anonymous Tue Apr 5 01:53:18 2011 No.2833931 >>2833889 Do you consider businessmen and women "people?"

>>	resident /sci/ economist Tue Apr 5 01:53:18 2011 No.2833933 >>2833916 You arent listening to anyone. A monopolies dont cause inflation, shortages, or low wages, poverty, poverty, or poverty.

Anonymous Tue Apr 5 01:56:18 2011 No.2833942

>>2833920

I dont think economics deals with any of this finance stuff.

Saying nothing of value was produced because someone made money on stocks is wrong.

The vale of stock is based off certainty that the company is doing well. If you buy stock, you arent helping the company, but companies make money off selling and buying their own stock when they anticipate they are going to be successful. If buy stock, you increase demand, and increase the value of the stock, which helps the company make money off their own stock. Money that they invest back into their operations, which helps produce things of value.

The financial markets alone cant be an economy, but they are tried to real world goods and services.

>>	Anonymous Tue Apr 5 02:01:18 2011 No.2833957 >>2833942 >I dont think economics deals with any of this finance stuff. it's called financial economics and it is just as relevant as any other market it needs to be regulated equally, if not more

Anonymous Tue Apr 5 02:01:18 2011 No.2833958

>>2833902
artificial incentives driven by marketing, credit and government intervention. 2/3 of the world live in on the poverty line, make trinkets and textiles to support your standard of living. all the waste and resources get dumped and taken from them, innovation driven by brain drain from countries who desperately need them the most. the system is artificial and unsustainable. how do people claim capitalism have triumphed (fukuyama - end of history) when only a fraction of the planet manage to prosper from it? it's like saying my education system is great because out of 100 kids i've managed to raise a genius while the other 99 are beggars, criminals, murders.

Anonymous Tue Apr 5 02:06:18 2011 No.2833970

Debt Ceiling! How bad could this really get?

>http://www.treasury.gov/connect/blog/Pages/letter-to-congress.aspx

"Defaulting on legal obligations of the United States would lead to sharply higher interest rates and borrowing costs, declining home values and reduced retirement savings for Americans. Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover."

Anonymous Tue Apr 5 02:06:18 2011 No.2833971

>>2833958
only a few countries profited from it because only a few countries attempted it. America, for instance, was a great experiment in what freedom can do. Capitalism is the only reason America is a super power today. Third world countries that are implementing freer markets are seeing a rise in their standard of living. Look at india and china. and pretty much every other 3rd world country has an oppressive government holding them back.

Anonymous Tue Apr 5 02:07:18 2011 No.2833975

>>2833958
Look at the world 100 years ago. What you could buy, who could buy it, how much. Now look at today.
The developed world has simply reaped the benefits of capitalism first. Once developing nations establish coherent rule of law and start producing shit for trade, their standards of living will shoot up. We're still in the transition period.

Shut up, Else, sell your computer, and donate the funds so a farmer in Africa can buy a goat.

>>	Anonymous Tue Apr 5 02:09:18 2011 No.2833979 econ-illiteratefag here just curious, what school of thought do all you econfags subscribe to? are you keynesians, austrians, marxists, monetarists, etc? ie how much gov intervention or lack thereof do you like with your markets?

>>	Anonymous Tue Apr 5 02:11:18 2011 No.2833988 >>2833979 austrian. I ascribe to it because it allows the most freedom and makes the most sense. No government intervention at all. No central bank.

>>	Anonymous Tue Apr 5 02:13:18 2011 No.2833994 Saw Inside Job this weekend. How accurate is this to what caused the 2008 meltdown?

>>	Anonymous Tue Apr 5 02:13:18 2011 No.2833996 >>2833988 what about natural monopolies? doesn't that shit ruin everything?

>>	Anonymous Tue Apr 5 02:15:18 2011 No.2834003 >>2833996 give me an example.

>>	Anonymous Tue Apr 5 02:17:18 2011 No.2834006 America is no longer a capitalist country. It is a mix of fascism and corporatism.

>>	Anonymous Tue Apr 5 02:17:18 2011 No.2834008 >>2833979 Austrian. Fell in love with the theory when the economy was going from out of the gutter to down the drain.

Anonymous Tue Apr 5 02:19:18 2011 No.2834011

ITT: Total ignorance of the following.

1: Theft
2: The nature of a science where experimentation is impossible or difficult, facts come from limited sources or are statistical with significant margins of error and the system is a large number of interoperating funtions and factors, including factors that are unpredictable.
3: Politicisation.
4: Over-simplified abstractions
5: Playing the blame game, failing to assess solutions relative to other available and feasible solutions and their effects wider than the problem area.

Anonymous Tue Apr 5 02:19:18 2011 No.2834013

>>2833971
China runs a form of state capitalism and India isn't even approaching functional as far as democracies go.

Remember China had a form of fiat currency 1000 years ago and it failed them.

Britain, and western Europe were no less capitalist than America, the ascendency of the U.S is not owed to "capitalism" alone - the aftermath of ww2 and the state of the europe at the time was ripe for exploitation.

>>2833975
http://www.globalissues.org/article/4/poverty-around-the-world
yes we are seeing the the standards of living shoot up, and it's China who are responsible for most of it. again they don't practice western free market capitalism. i'm not bemoaning the virtues and capitalism so we can go back to living a feudal live style, just contradicting the people who blindly cheer hurdur - capitalism saved the world!!11 when it's quite clear most of the world is still in a pretty shitty state.

>>	Anonymous Tue Apr 5 02:20:18 2011 No.2834015 >>2834003 like hypothetically if one firm were to buy out every other firm making a particular product, doesn't that give them a carte blanche to drive down wages and drive up prices to ridiculous levels?

Anonymous Tue Apr 5 02:20:18 2011 No.2834017

>>2833996
A few short remarks.

First of all: even if there is only one water supplier, that still doesn't mean there is a really 'bad' monopoly, because if that system goes rogue, it won't be that hard to go to the next city, or use water bottles, for water. If there is like one supplier of water in a city, it would make sense to make 'strong' contracts, so it doesn't decide to 'cheat' on you (business do tend to do that sometimes, on a small scale, depending on the level of competition.)

Second of all; even if there is a 'monopoly'; doesn't mean he can charge any price. When the price of water goes up, people look to alternatives. (1) Catching rain water, (2) using a broom in stead of the hose to clean the drive way, (3) use bottled water, ...

Thirdly. A friend of mine - who has zero care in politics, and is probably a little bit socialist, but has no idea about economics and all - went to Peru last year for a year to live with a family. 'Water' was supplied by competing firms by tankwagons, who you'd call, and they came within 24 hours to fill up you water tank (which were huge). There was no central mechanism of pipes under the ground; that was the way to get running water. Obviously; there were a few competing firms (I think she talked about like 4). Barriers to entry: not that high.

Forth of all: even if you are afraid of a monopoly; the 'water supply mechanism' could be owned by 'the city' (kind of like a gated community like thing) and the rights to manage it, could be sold on an annual base towards one competitor. That could be a way to solve the problem of the monopolist.

Just a few thoughts.

Anonymous Tue Apr 5 02:21:18 2011 No.2834019

>>2834003
Ma-Bell anti-trust case. For a monopoly, the profit-max point is usually below the social optimum, but at the same time some goods/services are best delivered by a single large firm due to ever increasing economies of scale.
As such, you need something, usually government, to make sure the price is at social optimum, not at monopoly profit.

>>	Anonymous Tue Apr 5 02:21:18 2011 No.2834020 >>2834013 You do know that most new businesses in China are privately owned, right? China's getting strong and it isn't because of the state interference of capitalism, it's because of capitalism.

Anonymous Tue Apr 5 02:22:18 2011 No.2834024

>>2834008
>Austrian economists reject empirical statistical methods, natural experiments and constructed experiments as tools applicable to economics.

Austrian school is the astrology of economics.

They simply try to make philosophical arguments that aren't based on anything realistic or testable. They live in a fantasy world where markets don't create pollution and greed leads to peace and prosperity

you can gobble up their bullshit, but it isn't worth much

Anonymous Tue Apr 5 02:23:18 2011 No.2834027

>The Austrian praxeological method is based on the heavy use of logical deduction from what they assert to be undeniable, self-evident axioms or irrefutable facts about human existence.

God damn they are dumb as shit. They want to make a priori, axioms of human behavior and market action

ROFL

how idealistic and full of air can you get?

>>	Anonymous Tue Apr 5 02:24:18 2011 No.2834033 >>2833996 >natural monopoly Those don't exist. And even if they did, it wouldn't necessarily be a bad thing.

>>	Anonymous Tue Apr 5 02:24:18 2011 No.2834035 >>2834024 austrian school confirmed as astrology. next.

Anonymous Tue Apr 5 02:25:18 2011 No.2834037

>>2834024
you can't really use mathematics and models to predict human behavior.

Austrian economics has a strong foundation in the actions of humans. doesn't mean it's "astrology".

www.mises.org for anyone who is interested in at least learning about the theory for themselves instead of listening to idiots on 4chan.

Anonymous Tue Apr 5 02:26:18 2011 No.2834040

i took econ 101 once, shit blew my mind.

they taught me that minimum wage, welfare, social security, labor unions, regulation, rent controls, subsidies, socialized medicine, etc were bad

and that sweatshops and investment in the third world are hella cool.

i don't know if i was indoctrinated but what they said made sense at the time.

resident /sci/ economist Tue Apr 5 02:26:18 2011 No.2834041

I think the austrian school is good in that it promotes free markets, but its bad at realizing when markets fail.

My idea is that markets should be free up to the point when they are failing. I define failure these ways

1. Incredible negative externalities the firms have no interest in solving. Pollution is an example of this. Everyone is put at a greater risk of developing lung cancer, bronchitis, cardiopulmunary disease because of air pollution. The government should encourage, and if necessary enforce taxes and standards on the companies involve.

2. When the market operates in a way that is greatly inefficient and fails the consumer. Like healthcare. Insurers are encouraged to not provide coverage, doctors are encouraged to diagnose sickness, and the patient has no idea what the costs of quality of serve he or she is getting. The government needs intervene in some way.

>>	Anonymous Tue Apr 5 02:26:18 2011 No.2834042 >>2834015 So... what's to stop me from paying the workers more, and selling the product at a lower price? Unless the firm put up some serious entry barriers, competitors would enter the market every time they tried to drive up prices.

resident /sci/ economist Tue Apr 5 02:27:18 2011 No.2834050

>>2834033

Natural monopolies definitely do exist. Its called returns to scale yo. The bigger company can produce goods at a rate far more efficient than a smaller firm.

for instance, Toyota is super good at making cars, but for you to make one car, would probably take a shit ton of time. Its because toyota is large that they can produce cars so well. Naturally, the car industry favors the larger car companies. I know the car industry isnt an example, but it is an example of the market working far more to the benefit of the larger firm than the smaller firm. And that leads to a natural monopoly

resident /sci/ economist Tue Apr 5 02:30:18 2011 No.2834057

>>2834042

His example was ridiculous to begin with. A single firm cant just buy out every other competitor. But even if they did, they doesnt mean they can just drop the wages. The monopolistic firm has a monopoly on a product, they dont have a monopoly on jobs.

Anonymous Tue Apr 5 02:33:18 2011 No.2834065

>you can't really use mathematics and models to predict human behavior.

>Austrian economics has a strong foundation in the actions of humans. doesn't mean it's "astrology".

it does because it's pure philosophy and doesn't bother to look at empirical data and reality

they imagine a platonic reality where markets are perfectly efficient and greed always leads to efficient equilibrium

instead of looking at actual human behavior and seeing the irrationality in consumer choices, they think humans act in some a priori axiomatic ways...complete bullshit

Anonymous Tue Apr 5 02:34:18 2011 No.2834068

>>2834050

Umm, no?
That denies the existence of niche markets. And even if it were to become a monopoly, by your own definition, they did it by being the most efficient and getting the most customers which would require giving better prices or care.
The instant that the company raises prices or lowers care to unacceptable levels, competitors will enter the market, assuming to artificial barriers to entry like government regulations.

Look at AT&T back when it was a government monopoly. The instant that regulatory barriers to entry were removed, competitors sprung up and the field experienced innovation. The phone industry is a perfect example of an alleged natural monopoly due to the economies of scale, yet they couldn't protect their existing monopoly power.
So to assume that a monopoly will arise out of a competitive field is a stretch.

>>	Anonymous Tue Apr 5 02:34:18 2011 No.2834071 >>2834065 austrian school confimred for complete bullshit humans aren't rational markets aren't efficient next.

>>	Anonymous Tue Apr 5 02:37:18 2011 No.2834077 how crazy is marxism from an economic perspective?

Anonymous Tue Apr 5 02:38:18 2011 No.2834078

>>2834068

No no no, they didnt become the monopoly because they were efficient. They became efficient because they were the monopoly. Its the other way around. You see what I mean? The larger company can produce X good at a lower average cost then the smaller company, so they get greater returns then the smaller company, which means they eventually out compete the smaller company.

Even if competitors enter the market, because they are smaller and just starting out implies they are working less efficiently than the monopoly.

Your AT&T example is funny, because Im pretty sure the government forced the break up of AT&T. You cant compete with AT&T when they own the lines.

Anonymous Tue Apr 5 02:38:18 2011 No.2834079

>>2834068
>The instant that the company raises prices or lowers care to unacceptable levels, competitors will enter the market, assuming to artificial barriers to entry like government regulations.

there are also natural barriers to entry, which may prevent other competitors from balancing everything out...

like if they lack the technology, or resources, or money, or they dont have the rights to land...

competition may be blocked naturally, without government intervention

and the monopolist or cartel may increase prices to levels that fuck everyone over, specially if the good has low elasticity

>>	Anonymous Tue Apr 5 02:39:18 2011 No.2834086 >>2834078 >The larger company can produce X good at a lower average cost then the smaller company, so they get greater returns then the smaller company, which means they eventually out compete the smaller company. good fucken point bro

>>	Anonymous Tue Apr 5 02:43:18 2011 No.2834094 austrian astrology:0 real economics: 1

>>	Anonymous Tue Apr 5 02:46:18 2011 No.2834101 Fuck you guys. All you do is shit on this board with the bullshit theories you were taught. Also alan greenspan was responsible for the housing crash and now bernake is making the dollar worthless and getting us deeper into debt. Great job faggots

Anonymous Tue Apr 5 02:48:18 2011 No.2834110

>>2834101

You are only complaining because you arent taking into account the multitudes of economists who didnt ruin everything. Also, I dont know how Greenspan is responsible for the housing meltdown. The fed just regulates things like reserve rates and money production. They arent in charge of the internal behavior of banks such as mortgages and loans.

>>	Anonymous Tue Apr 5 02:49:18 2011 No.2834112 >>2834101 and 1+1 = 2 what else is new?

>>	Anonymous Tue Apr 5 02:50:18 2011 No.2834116 >>2834078 Even if a monopoly would arise from a competitive market, there would be a natural price ceiling at the competitive price level. So you have a potential to be better off with a monopoly, but no potential to be worse off.

Anonymous Tue Apr 5 02:52:18 2011 No.2834124

>>2834110

the fed is also tied with the treasury, they influence economic policies

they argued to deregulate derivatives very strongly which is what the banks wanted

they made it possible for banks to sell complex derivatives and acquire huge amounts of risk in the process

when the banks were getting "free money" because 0% interest and their buddies deregulated derivatives, they went batshit crazy

>>	Anonymous Tue Apr 5 02:52:18 2011 No.2834126 >>2834110 Omg. They ARE in charge of how much money banks can lend

>>	Anonymous Tue Apr 5 02:53:18 2011 No.2834128 >>2834126 and at what cost 0% is free money lol they also influence policy very heavily...even though they aren't supposed to

resident /sci/ economist Tue Apr 5 02:54:18 2011 No.2834130

>>2834116

Wait... what? A monopoly in a competitive market?

If you have a competitive market, the its unlikely a natural monopoly will form. Like, crackers. There arent huge returns to scale when it comes to crackers. But when it comes to cars, like I mentioned there are.

If its truly a monopoly the consumer isnt better off with it. Because the monopoly is setting the price at a societally inoptimal point.

Anonymous Tue Apr 5 02:54:18 2011 No.2834132

>>2834110
>Also, I dont know how Greenspan is responsible for the housing meltdown.
http://www.youtube.com/watch?v=oosq3TPgHH0

Greenspan lowered interest rates, forcing investors out of traditional markets into hard assets, most notably real estate. The Congress, Frannie and Freddie, the SEC, the CFTC, the OTS, and the FDIC pushing real estate investments.
This gave an incentive for sub-prime mortgages, and things kinda snowballed.

>>	Anonymous Tue Apr 5 02:56:18 2011 No.2834140 >>2834132 Okay I dont know a lot about this. Ill just accept tht you are right because I dont want to look into this right now, although I am interested.

>>	Anonymous Tue Apr 5 02:56:18 2011 No.2834141 >>2834116 >a competitive monopoly price ceiling the fuck fullretard.gif

Anonymous Tue Apr 5 02:56:18 2011 No.2834138

>>2834116

>Even if a monopoly would arise from a competitive market, there would be a natural price ceiling at the competitive price level.
So you have a potential to be better off with a monopoly, but no potential to be worse off.

>competitive price ceiling in a monopoly

>mfw

>>	Anonymous Tue Apr 5 02:57:18 2011 No.2834142 >>2834130 What about walmart?

>>	resident /sci/ economist Tue Apr 5 02:57:18 2011 No.2834144 >>2834142 ...What about walmart?

>>	Anonymous Tue Apr 5 02:58:18 2011 No.2834146 >>2834144 Its basically a monopoly

Anonymous Tue Apr 5 03:00:18 2011 No.2834151

>>2834130

But monopolies have to arise out of competitive markets. There is no other way for them to arise.
Even if you have a company that is a monopoly of a brand new technology, the technology itself was a product of a competitive market. Competitors will arise in that new technology.

>If its truly a monopoly the consumer isnt better off with it. Because the monopoly is setting the price at a societally inoptimal point.
Pricing at a societally inoptimal point is only true for coercive monopolies, not natural monopolies. Those are two different things. If you're looking for a coercive monopoly, that's defined as an institution that sets arbitrary production levels and charges arbitrarily decided prices with no respect to the market because competitors are not allowed to compete. Natural monopolies have to respect market pricing because they are vulnerable to competition.

>>	resident /sci/ economist Tue Apr 5 03:00:18 2011 No.2834153 >>2834146 Well, its not a monopoly, but anyway, I dont know what your point is. So what is walmart is a monopoly? What are you trying to say

resident /sci/ economist Tue Apr 5 03:03:18 2011 No.2834157

>>2834151

Okay, but a competitive market isnt like the cure to a monopoly or anything. A natural monopoly is one that forms naturally, due to returns of scale like I mentioned above.

>Pricing at a societally inoptimal point is only true for coercive monopolies, not natural monopolies. Those are two different things. If you're looking for a coercive monopoly, that's defined as an institution that sets arbitrary production levels and charges arbitrarily decided prices with no respect to the market because competitors are not allowed to compete. Natural monopolies have to respect market pricing because they are vulnerable to competition.

What? No I think it just applies to plain ol' monopolies. The production levels and prices arent abritrary, they are the ones that bring in the most profit. And they cant be decided in respect to the market, because the market doesnt exist.

Natural monopolies arent vulnerable to competition, because they beat the competition due to efficiency.

Anonymous Tue Apr 5 03:07:08 2011 No.2834165

wtf happened while I was gone?

Anyway, conjuring up a model and thought experimenting the outcomes is certainly a good way to think through problems.

Closest thing to useful in economics is Theory of the firm: underlying premise is that firms act to maximize profit. Actually not a bad assumption.

Firms charge price equal to marginal cost? nigga please, there's not one company in the world (besides your mom and pop shops) that even know what their marginal cost is.

HurrDurr more power= more price control. I really need a whole department of economists to tell me this?

deregulated markets regulate themselves? how long did it take for the banks to implode the entire economy under that theory? Ohwell, let's ignore the unpleasant truth and keep spouting same nonsense. In your market that self regulates:
1. everyone has perfect knowledge of all outcomes (not real)
2. every company/entity is maximizing utility from profit (not real)
3. markets can easily change price to adjust to shifts in supply/demand (not real)

i'm sure implications related to this model will be extremely useful in analyzing reality.

>sorry for rant, dogmatic econfags make my head hurt

>>	Anonymous Tue Apr 5 03:09:18 2011 No.2834174 >>2833434 Why is an economics thread being posted on a science board. Economics isn't science.

Anonymous Tue Apr 5 03:10:18 2011 No.2834175

>>2834157

>Okay, but a competitive market isnt like the cure to a monopoly or anything.
Yeah it is. Who's better at taking down monopolies, governments or entrepreneurs?
Before you say that government will be better at destroying monopolies with regulation, think about what can overcome red tape more efficiently. Companies with a red tape department, or startups that are struggling to make payroll? The regulations only keep out competitors, making the existing large companies even stronger.

>Natural monopolies arent vulnerable to competition, because they beat the competition due to efficiency.
They beat the competitively set price level. The moment they try to exceed the competitive price level, they will be vulnerable to new entrants (competition).
You're talking about existing competition (or the lack of), whereas I'm speaking of potential competition.

>>	Anonymous Tue Apr 5 03:11:18 2011 No.2834180 Economics is garbage, Economics majors are training to become professional gamblers & leeches >>mfw economics on my /sci/ GTFO

>>	Anonymous Tue Apr 5 03:11:18 2011 No.2834181 >>2834165 you forgot 4) Firms acts in its self interest (real world: executives act in their own interests, doesn't matter if they destroy the firm).

>>	sage sage Tue Apr 5 03:13:18 2011 No.2834186 >>2834180 i second this CAPTCHA: GTFO ECOFAGS

>>	Anonymous Tue Apr 5 03:13:18 2011 No.2834188 >>2834181 Lehman Bros?

Anonymous Tue Apr 5 03:15:18 2011 No.2834194

>>2834180
>Economics majors are training to become professional gamblers & leeches

lol, no I don't think so. Economics is to business what a computer is to fruit. Umm, well I suck at analogies. How about what my comment is to cleverness. The two basically have nothing to do with each other. I mean perhaps a bank might find some of it useful. Certainly the federal reserve. But other than that, I imagine most econ majors are either going to write nonsensical "science" papers so other economists can read and feel important or otherwise they'll become teachers to train more economists.

Anyway, that's my rant. To conclude, I don't think they'll be gamblers and leeches simply because no business will hire them.

Anonymous Tue Apr 5 03:15:18 2011 No.2834195

>>2834175

>Yeah it is. Who's better at taking down monopolies, governments or entrepreneurs?

In the case of a natural monopoly, the government.

>The regulations only keep out competitors, making the existing large companies even stronger.

This has nothing to do with regulation. In a circumstance where their is no regulation, a natural monopoly can still form. Due to returns of scale, which I mentioned above.

>They beat the competitively set price level. The moment they try to exceed the competitive price level, they will be vulnerable to new entrants (competition)

We are talking about different price levels. What can happen is the new entrant has to have a high price to survive because they arent efficient, but the monopoly is efficient and can undercut that price, which puts the new entrant out of business, and the monopoly can still be selling at a way higher price than what they can afford.

Does that make sense?

Here is a list of prices from highest to lowest

1. Minimum Price a new entrant would need to survive (lets say $80 per unit)
2. Price the natural monopoly will set to maximize profits (lets say $79 a unit)
3. Minimum Price the natural monopoly needs to survive ( 2 cents a unit)

Anonymous Tue Apr 5 03:15:18 2011 No.2834196

>>2834181
>every company/entity is maximizing utility from profit (not real)

>maximizing utility from profit (not real)

>maximizing utility from profit

why do i even bother? The whole point, should you decide to actually take it, is that studying the economy is a good idea, but that urnotdoinitrite.

wonder if anyone's gonna get it this time?

Anonymous Tue Apr 5 03:21:18 2011 No.2834214

>>2834157
Also, you'd have to define societally inoptimal

The price level at which ____?

inb4 himming and hawwing about various levels it could be at. It's just a fancy phrase you use to pretend the neoclassical models pay any attention to distribution, when, in fact, they do not.

Hard mode: any argument to the contrary
God mode: find a neoclassical model that deals with production and distribution decisions (hint: there isn't one)

Anonymous Tue Apr 5 03:21:18 2011 No.2834215

>>2834194
>Economics is to business what a computer is to fruit

ya maybe Austrian economics, no business gives a shit about that, but real economics is very important to businesses.

Specially micro-econ and econometrics. Macroecon is also important in terms of currencies, energy resources, global trends, emerging markets, etc..

But a lot of firms and businesses hire economists. Google, for example, has a huge team of statisticians and econometricians. Hell, the head of their department Hal Varian is an economist.

>>	Anonymous Tue Apr 5 03:22:18 2011 No.2834219 >>2834215 Why does google need a Chief economist? http://www.youtube.com/watch?v=Mlb8u8ftge4

>>	Anonymous Tue Apr 5 03:23:18 2011 No.2834222 >>2834219 ya google has like 200+ econometricians working on micro-econ and statistics lol

>>	Anonymous Tue Apr 5 03:23:18 2011 No.2834225 >>2834065 LOL I hope that this was clever satire of the Neoclassical School of Economics

Anonymous Tue Apr 5 03:24:08 2011 No.2834227

>>2834165
>Firms charge price equal to marginal cost? nigga please, there's not one company in the world (besides your mom and pop shops) that even know what their marginal cost is.

Haha, no that's not why that part is unrealistic. I'm not an engineer, but I imagine businesses know exactly what their marginal cost is. They can use regression analysis and work with engineers to estimate the cost very accurately. I think there's a whole course on this in accounting called "cost accounting."

It's the revenue side that is imprecise, not the cost. Because the rule is not price equals marginal cost, but rather *marginal revenue* equals marginal cost. Price is marginal revenue only when there's perfect competition and the demand curve is flat. Otherwise, there's a markup involved.

However, this involves estimating the demand curve which isn't possible really. I mean you'd need to vary the price substantially to get enough of a "sample size" in your regression analysis. And even then, it's a behavioral function where a consumer's "taste" is a parameter - which can't be quantified.

The problem is only compounded if it's a new product the marketing team is bringing to the consumer.

This, imo, is why the business side to economics is not necessarily very realistic.

Obviously, the consumer side and utility theory is a complete load of crap.

captcha: science ovirpt

>>	Anonymous Tue Apr 5 03:24:18 2011 No.2834228 http://www.analyticrecruiting.com/list_job.asp?job_id=DB173&category=A&keyword1=&keyword 2= Masters or Phd in econometrics 130k starting

>>	resident /sci/ economist Tue Apr 5 03:24:18 2011 No.2834231 >>2834214 Societally inoptimal (or, I should say socially inefficient) would be a point where the price doesnt reasonably represent the cost.

Anonymous Tue Apr 5 03:26:18 2011 No.2834239

>>2834219
You need someone who understands how the business environment will affect the individual firm.

I'm sure s/he's sitting around looking for nash equilibria and taking derivatives of strictly concave utility functions.

>betterletthemknowit'ssarcasm.jpg

>>	Anonymous Tue Apr 5 03:27:18 2011 No.2834242 http://www.analyticrecruiting.com/list_job.asp?job_id=16735&category=A&keyword1=&keyword 2= Phd in Econometrics. 150k starting.

>>	Anonymous Tue Apr 5 03:27:18 2011 No.2834243 >>2834231 Doesn't reasonably represent the cost what is reasonably represent the cost? inb4 another meaningless phrase related to price

Anonymous Tue Apr 5 03:28:18 2011 No.2834248

>>2834231

Actually I am going to take that back, because I can think of a ton of circumstances where the prices dont reflect the costs and its perfectly acceptable.

Im going to modify what I said and say, what is socially inefficient, is when in the long term the price remains significantly higher than the costs of production.

>>	Anonymous Tue Apr 5 03:28:18 2011 No.2834250 >>2834239 you also need to know how to handle data, interpret it, and how to deal with it efficiently, he's essentially a statistician who also understands the economics of the business and world it's just a great combination

>>	Anonymous Tue Apr 5 03:29:18 2011 No.2834255 >>2834242 Economics = bs Econometrics = Stats + business knowledge make sure to get it right nubs, Stats is 100% legit. its all that voodoo garbage hurrdurr P=MC stuff that aint worth anything.

Anonymous Tue Apr 5 03:30:18 2011 No.2834258

>>2834250
>know how to hand pick data, misinterpret it and how to use intentional logical fallacies to justify your employer's conclusions efficiently
fix'd

Let's face it, economics is like sociology, heavily politicised and corrupt. The real social scientists and economists are going to be the least known and least well paid.

resident /sci/ economist Tue Apr 5 03:32:18 2011 No.2834264

>>2834243

The reason I said "reasonably represent the cost" is because I wanted to say "the prices must represent the cost" but I am acknowledging the world doesnt work like the perfect and unrealistic examples economists use to describe the markets. It would be smooth and efficient for companies to make 0 profits year after year. But the reality is they will make a small profit margin (like 1% to 5%) in a stable period. So I am accepting that the prices will be above the costs, but I am not accepting prices that are naturally and extortionately high over a sustained period of time.

Anonymous Tue Apr 5 03:32:18 2011 No.2834269

>>2834248
ok

HURRDURR No firm ever makes profit again

LOLOLOLOLOLOLOL

i know you meant economic profit, so lets talk about how worthless of an idea that is?

let's arbitrarily define some rate of profit that makes no new firms want to enter a market and no firms want to leave the market. If an entire economy were at this state, what would be the accounting rate of profit? No need to get too specific (if you don't want to)

>inb4 mind=blown

Anonymous Tue Apr 5 03:34:18 2011 No.2834279

>>2834255
>make sure to get it right nubs, Stats is 100% legit. its all that voodoo garbage hurrdurr P=MC stuff that aint worth anything.

Pretty well said.

Then again, if you're going for say a "business degree" (supposedly gives you more realistic training) then you get classes that aren't useful plus a lack of statistics. So maybe economics is better.

Anonymous Tue Apr 5 03:35:18 2011 No.2834283

>>2834264
>naturally and extortionately high over a sustained period of time

wat means this?

ITT: 2 posts ago inb4 was spot on

Also, don't u know that profit is not what consumers pay? They pay price. I don't care if my 99c taco at taco bell makes them 1c or 90c profit, i want my price low. Rate of profit is meaningless- its rate of change in price that scares consumers off.

>pls2lrn how economy works

Anonymous Tue Apr 5 03:36:18 2011 No.2834284

>>2834195

>In the case of a natural monopoly, the government.
Let's use your car example.
GM used to control 60% of US market share of automobiles. If they were indeed a natural monopoly or at least one in the making, then they shouldn't have swung so far to the other side that they went bankrupt. Other small, more inefficient car companies created superior cars to close the market share gap.
Smaller companies often post higher profit margins because they service niche markets. For example, BMW produces fewer cars than GM, yet make higher profit margins. The idea that one monopoly company will arise based only on efficiency and price levels isn't supported by the real world.

>1. Minimum Price a new entrant would need to survive (lets say $80 per unit)
>2. Price the natural monopoly will set to maximize profits (lets say $79 a unit)
>3. Minimum Price the natural monopoly needs to survive ( 2 cents a unit)

That assumption, sir, is heroic to the point that I can not recall an instance in history where that has happened, and can't imagine a time in the future when it would.
However, you have grasped what I was attempting to convey that there is a price ceiling that the monopoly has.

Here's the problem with your assumption.
First, if the monopoly in question can find customers who will buy at $79 a unit, there is no problem. The monopoly isn't being coercive, its customers are willingly purchasing the product or service. Nothing wrong.
Second, even under the car example, GM proved that approaching a natural monopoly status isn't sustainable. As your market share grows larger, it becomes exponentially more difficult to hold onto it.

Anonymous Tue Apr 5 03:37:18 2011 No.2834288

>>2834269

I didnt even use the word profit in that post.

I am not saying "Lets kill every company that makes over a certain amount of profit"

but I am saying

"If there is a monopoly, and it is making incredible profits year over year, that can be an indicator that there is a market failure, and government influence and intervention might be required.">>2834283

resident /sci/ economist Tue Apr 5 03:39:18 2011 No.2834299

>>2834283

I understand you dont care whether your taco costs 1 cent or 99 cents. Fortunately we live in a reality where there is a competitive taco market, but in the event there is a taco monopoly, the market... including yourself... would be better off with cheaper tacos the monopoly is not willing to produce.

You cant act like you wouldnt prefer tacos to be 2 cents.

>>	m1ckey !dkJI/P7Y32 Tue Apr 5 03:39:18 2011 No.2834304 Wow. ITT: people espouse bullcrap that only serves to underscore their ignorance of fiscal and monetary policy, and of economics as a whole. >>2833808 Or a first-year introductory microeconomics course. brb

Anonymous Tue Apr 5 03:42:18 2011 No.2834315

>>2834255
>>make sure to get it right nubs, Stats is 100% legit. its all that voodoo garbage hurrdurr P=MC stuff that aint worth anything.

pretty poorly said, that P=MC gets very technical and important past econ100

maybe if you keep going you'll see how it is useful to almost every firm on earth

specially in analyzing competition, pricing and monopoly power

Anonymous Tue Apr 5 03:44:18 2011 No.2834331

>>2834288
inb4 markets aren't efficient conclusion

Why aren't they efficient?

The thought-experiment model you come up with is completely wrong, so conclusions based on that model are wrong.

Also, we were talking about the idea of exorbitant profit rates (price not accurately reflecting costs, what else is this?).

The only thing that makes econ not a science is that it refuses to discard its own errors. Should, at some point in time, economists decide to wholesale depart from the models that have led them to so very many erroneous conclusions, I'm sure that it wouldn't be so odious to those who have some idea about how business works.

Anonymous Tue Apr 5 03:47:18 2011 No.2834340

>>2834284

The car industry is an example of returns to scale, but its not really an example of a natural monopoly. Its an example of returns to scale, because america used to have like a million car companies. All of them went out of business or got bought out. Its an example of larger companies being more efficient and being able to out compete smaller companies... which is true, and needs to be understood to understand natural monopolies.

However... once a car company is big enough, its efficiency is about the same as the companies bigger than it. So for example, GM has 60% of the market, is still just as efficient as Ford who is 20% of the market. But both of them are incredibly way more efficient than Carl's Super Awesome Car Factory which is .01% of the market.

In some industries the the vast differences in returns to scale still exist between the big companies, which will lead to a natural monopoly.

> I can not recall an instance in history where that has happened

I exaggerated it to make it clear. But if I switched those prices around to like $50, $30, and $20, I bet it would look a lot more realistic.

>Nothing wrong.

When we talk about social efficiency there isnt a thing as right and wrong. If its not wrong because they are willingly paying $79, and its not wrong because they are willingly paying $99 dollars then

79 = not wrong = 99
79=99

Maybe thats a dumb way of explaining this.

My point is society can be better, by fixing a various problem with the price. If you regulate this market some how, like breaking up the monopoly, or subsidizing competitors, or taxing the monopoly or something, you can make society a better place.

>As your market share grows larger, it becomes exponentially more difficult to hold onto it.

The size of the market has nothing to do with efficiency. If the number of consumers grows larger, than the monopoly only grow proportionally larger.

Anonymous Tue Apr 5 03:49:18 2011 No.2834345

>>2834315
>Useful to every firm on earth

Theoretically, certainly.

In practice, there's not one large firm that has any idea what their actual marginal cost is. It's also not how price is picked in the first place (pls2learn pricing strategy)

and pls econ 101? really? There's not one economic class ever that's not gonna take a derivative of some twice differentiable function of inputs to find MC (unless they can't even do that).

I quit econ, doing stats now.

>lifeisgood.jpg

resident /sci/ economist Tue Apr 5 03:50:18 2011 No.2834350

>>2834331

>Why aren't they efficient?

They arent efficient because the prices dont represent the costs (in the long run). You are paying $5 dollars for a $3 thing. Its at a point, where the capacity of the firm to produce and deliver said goods wouldnt be hampered by a lower price. And as a result the consumers and all of society (minus the firm) are paying a higher price than they need to. Money that could go towards other things.

>>	Anonymous Tue Apr 5 03:51:18 2011 No.2834356 >>2834340 If a consumer wasn't willing to pay a price, they wouldn't. There would never be such a price that was wrong to charge unless the good was a life-or-death necessity.

>>	Anonymous Tue Apr 5 03:53:18 2011 No.2834367 >>2834356 >There would never be such a price that was wrong to charge unless the good was a life-or-death necessity. ok there u go, so you lost the debate food is life or death medicine is life or death

>>	sage Tue Apr 5 03:54:18 2011 No.2834368 >>2834356 HEALTHCARE HEALTHCARE HEALTHCARE americunt

>>	Anonymous Tue Apr 5 03:54:18 2011 No.2834369 >>2834350 We just talked about this, but you dropped it without giving any answer. What is the price that represents cost?

>>	m1ckey !dkJI/P7Y32 Tue Apr 5 03:55:18 2011 No.2834374 >>2834356 Which is why the magnitude of the changes in the quantity demanded depend on the own-price elasticity of the good or service in question.

resident /sci/ economist Tue Apr 5 03:56:18 2011 No.2834377

>>2834356

I dont understand this disagreement. Are you trying to say you would prefer to live in a society where many goods are like 30% more expensive? And that extra cost just goes towards something frivolous because the company doesnt have anything purposeful to invest that money into?

I would never say a price is wrong, but, in SOME markets, in SOME cirumstances, natural monopolies can form.

Im not being some communist here saying the government should run the market, I think 99.9% of the time free markets work fine. Im just saying when they dont its not good, and that requires intervention.

Anonymous Tue Apr 5 03:57:18 2011 No.2834383

>>2834367
ITT: u didn't get the point.

your example was cars. Your agreeing with me implies that there is no such a 'societally inoptimal' price for any good that is not a life-or-death necessity. For example, your car example. or 99% of all the goods/services produced in the USA

>good try though :D

>>	resident /sci/ economist Tue Apr 5 03:57:18 2011 No.2834386 >>2834369 If the costs of production are $5, and the prices represents the cost, then the price is also $5.

resident /sci/ economist Tue Apr 5 04:00:18 2011 No.2834396

>>2834383

Hey dude there are multiple people here who go by "anonymous" you can tell by the distinct difference in sentence flow and capitalization that wasnt me.

By the way half the time I forget to put up the name "resident /sci/ economist." and I am in fact an economics major.

MY example of returns to scale was the car industry.

There is a social inefficient price, and that is a price which which reasonably represent the costs in the long run.

Anonymous Tue Apr 5 04:03:18 2011 No.2834412

>>2834374
hurrdurr i use econ terms to reiterate what referrenced post says.

>>2834377
Define Frivolous?

The entire point of the problem was (as stated before) that neoclassical models do not model distribution of production to begin with. Using it for that purpose is fruitless. It's why you can easily talk about firms setting prices, but when it comes to the idea of those prices dictating some distribution outcome (societally optimal would be one of these outcome), there's nothing to say.

urnordoingitrite

you don't have to take it personal :P

>>	Anonymous Tue Apr 5 04:05:18 2011 No.2834415 >>2834386 price represent cost no profit no businesses I already made fun of you once for this

>>	resident /sci/ economist Tue Apr 5 04:07:18 2011 No.2834421 >>2834412 Stuff like buying everyone in the office company ferrari's and then writing it off as a business expense. Absurdly large bonus's etc. Money spent just to spend money because you have money and you dont know what to do with it.

>>	resident /sci/ economist Tue Apr 5 04:08:18 2011 No.2834428 >>2834415 What? I dont understand what you are trying to say.

>>	Anonymous Tue Apr 5 04:09:18 2011 No.2834432 Costs don't determine prices. Prices determine costs. >100 year old fallacy.

>>	resident /sci/ economist Tue Apr 5 04:12:18 2011 No.2834437 >>2834432 Huh? Y'all explain yourselves better.

>>	Anonymous Tue Apr 5 04:13:18 2011 No.2834441 Economics is most boring science ever. /b/olshevik

Anonymous Tue Apr 5 04:13:18 2011 No.2834442

>>2834421
Like... you know..... having lots of stuff man....

Still haven't bothered to read any of the conclusions from my posts eh?

ITT: you're never going to be doing it right if you don't figure out how to follow an argument

Also, I'm not saying any kind of moral statement about firm profit. It's just that, from the beginning, there was no distribution consideration put into economic models. Even now, people are still hung up on growth ideas independent of how the growth is distributed in society.

m1ckey !dkJI/P7Y32 Tue Apr 5 04:13:18 2011 No.2834443

>>2834412
>>2834412
Nope, you just made an extreme case of whether or not the price set would be fair. Quite a difference there.

And are you claiming that neoclassical economics doesn't have a model for that? Did you even study the effects of, say, externalities or government intervention?

>>	Anonymous Tue Apr 5 04:14:18 2011 No.2834445 >>2834441 Nah my vote goes to botany It is useful. But boring.

Anonymous Tue Apr 5 04:15:18 2011 No.2834448

>>2834428
Econ Major

Doesn't know how to calculate profit

Average cost=5
Price= 5
profit= 0

clear enough now? god i feel bad- sorta like making fun of a retard

just don't bother trying to figure out what i'm talking about. Go get fully indoctinated until you're completely useless at understanding business. I hope to god you're just trolling me, but for some reason i doubt it.

>>	Anonymous Tue Apr 5 04:16:18 2011 No.2834452 >>2834437 For example: the prices of the productive factors that cooperate to produce a consumers' good increase when demand for that consumers' good increases.

resident /sci/ economist Tue Apr 5 04:18:18 2011 No.2834456

>>2834442

I dont have a problem with people having stuff, or a lot of stuff. I am saying, from the perspective of a responsible regulatory body, such as the government (if it was responsible) then it would be obvious that certain industries are not operating efficiently, or for the welfare of society.

If there is a reason I am appearing frustrated or irritated, is because you take what I say as an opportunity to make fun of me with comments like "like you know... having lots of stuff man" like Im some retard stoner. Am I wrong to think thats disrespectful? Why cant you just be like "Why do you care if someone has a lot of stuff? How is that a problem?"

Its just tiring for me to sludge through bullshit comments when I want to address a real idea you were presenting.

>there was no distribution consideration put into economic models.

If there is a reason I am ignoring comments, its because I dont see their relevance. So what? Distribution models, what are you talking about?

Anonymous Tue Apr 5 04:18:18 2011 No.2834458

>>2834443
lulz

The point was that, if the consumer doesn't mind paying the price, then the price wasn't societally inoptimal.

All i said was that, if you're not making it a requirement that every consumer be willing to purchase the good, then there's no cap to the socially optimal price.

No, the neoclassical models do not cover the idea of distribution in this way. Furthermore, Neoclassicists, in general, do not ever consider distribution of goods.

>>	Anonymous Tue Apr 5 04:19:18 2011 No.2834460 Goddamn it econfags dont you get it? You will mever be as rich as the people you admire None of you have something to offer entrepaneurial wise and im guessing most of you will not inherit a large wealth either

>>	Anonymous Tue Apr 5 04:20:18 2011 No.2834462 File: 31 KB, 200x150, Кокойты смищной.jpg [View same] [iqdb] [saucenao] [google] >>2834460

resident /sci/ economist Tue Apr 5 04:21:18 2011 No.2834468

>>2834448

Goddamnit, you were the one who posted a comment of sentence fragments that sounded like a caveman. When Im like "What the fuck are you talkiing about?" Its because I dont know what the fuck you are saying.

I dont know what the fuck you are talking about becuase when I said exactly that statement and you were the one who responded correcting me.

Anonymous Tue Apr 5 04:22:18 2011 No.2834470

>>2834456
easymode question:

Warren Buffet, Bill Gates

Kobe Bryant, Lebron James

Department Chair at your econ program, dean of business

If there's some level of profit that implies inoptimality, doesn't it also stand to reason that it should apply to individuals? Which group is in the cutoff?

>>	resident /sci/ economist Tue Apr 5 04:23:18 2011 No.2834474 >>2834452 Wait, what? When you say "the prices of the productive factors" do you mean costs? In which case, no, costs dont increase with demand.

>>	m1ckey !dkJI/P7Y32 Tue Apr 5 04:25:18 2011 No.2834477 >>2834458 You're dodging the question and ignoring what I said. Have you never heard of a deadweight loss? It's a way of evaluating inefficiencies in the distribution of goods and services.

EXeCONMAN Tue Apr 5 04:25:18 2011 No.2834478

>>2834468
Gotta try to communicate to the level of the audience. You weren't getting it when I was speaking (relatively) eloquently, so I dumbed it down a shade. Sorry If it was harsh, I really thought I was just being trolled.

i made name so u nubs know who i am

resident /sci/ economist Tue Apr 5 04:26:18 2011 No.2834480

>>2834470

No, it doesnt apply to individuals, because Lebron James is literally the only possible supplier of Lebron James. However, if you had a natural monopoly on lets say, computer software, there are loads of people capable of producing computer software.

EXeCONMAN Tue Apr 5 04:29:18 2011 No.2834484

>>2834477

Im saying, in (what I had thought) were no uncertain terms, that we were talking about distribution decisions and the neoclassical models' lack of insight in that field.

hurrdurr deadweight loss

its a way of evaluating PRODUCTION inefficiencies. Whether your neoclassical demand curve is made up of 10 people with 100k per year each or 1 person with 1mil and 9 with 0 is immaterial to the actual equilibrium in the model. Price is not a good measure of distribution for this reason.

Why i was talking, from the beginning, about distribution.

Anonymous Tue Apr 5 04:29:18 2011 No.2834486

>>2834478

Alright great.

Well looking back up this thread, the earlier post you said was asking me "When does price represent the cost?" And I said "if the costs were $5 and the price was $5 then the price would represent the cost." then you said

"price represent cost, no profit, no business" and I had no idea what that meant so I asked what it meant.

So do we want to go back to square one? What are you talking about?

I suspect you might have implied if there are no profits, they will go out of business, but thats not true. Am I right to suspect that?

>>	EXeCONMAN Tue Apr 5 04:30:18 2011 No.2834491 >>2834480 Is there some 'societally optimal' wage that lebron should be forced to accept for his labor? Why are firms so much different? Neoclassical models show individuals and firms both deriving utility from profit.

>>	Anonymous Tue Apr 5 04:31:18 2011 No.2834494 why dont we have physics arguments like this oh that's right cause econ is actually interesting and ppl debate it often

>>	m1ckey !dkJI/P7Y32 Tue Apr 5 04:34:18 2011 No.2834500 >>2834484 What. Price is one of axes in the graph, yes. Would you care to tell me what the other one is? I believe it answers your question.

>>	ActualEconGuy Tue Apr 5 04:34:18 2011 No.2834501 Hey i'm back any of you punks want to discuss how we can use game theory to interpret the contract curve?

EXeCONMAN Tue Apr 5 04:34:18 2011 No.2834503

>>2834486
If there's no profit, the business won't bother staying in business.

Don't get the economic profit they taught you in class mixed up with real profit.

Also, learn that neoclassical econ treats individuals and businesses the same. The major differences are supplier/demander instead of individual/business. Lebron, when going to the NBA, is the supplier of badass basketball. When he goes to the store, he's the demander (consumer, if you will).

Lebron has money that he couldn't possibly spend (as when we were discussing 'societally optimal').

The point, from the very beginning, was that these neoclassical models don't handle distribution of goods because they weren't built to do so.

>>	EXeCONMAN Tue Apr 5 04:35:18 2011 No.2834504 >>2834501 1980 is that way -------------->

Anonymous Tue Apr 5 04:35:18 2011 No.2834507

>>2834491

No I dont think so. Again I dont think this applies to individuals. A firm operates with society. Individuals arent a part of this scope. Lebron James isnt viewed as a firm, hes viewed as an employee, who's labor is worth a billion dollars. Lebron james can do whatever the hell he wants, and he signs a contract to work for a billion dollars thats fine. A billion dollars is a market equilbirum that accurately represents his value.

>>	Anonymous Tue Apr 5 04:36:18 2011 No.2834512 >>2834503 If there is no profit, then the business covered all its costs, and everyone is happy. In that, the company got the money it took to buy the materials, and pay the labor to make the product. Profit = Revenues - Cost

>>	EXeCONMAN Tue Apr 5 04:37:18 2011 No.2834513 >>2834500 missed point, but it's ok. don't state any ideas, you can't be proven wrong. I already explained the problem with the neoclassical demand curve, i guess you didn't read or didn't understand. zzzzzz

>>	m1ckey !dkJI/P7Y32 Tue Apr 5 04:37:18 2011 No.2834514 I have an important appointment, so I'll be back in an hour or so. See you, fags.

>>	resident /sci/ economist Tue Apr 5 04:37:18 2011 No.2834516 >>2834507 >>2834512 Im these guys by the way

EXeCONMAN Tue Apr 5 04:39:18 2011 No.2834523

>>2834512
Really? you think business is happy to just barely cover its costs?

come on kid, you've got to do better than that. There's not one business anywhere on the planet that's ok with covering costs. The one thing that neoclassical does right is assume that businesses are trying to MAXIMIZE profit, not get it to 0.

>>	m1ckey !dkJI/P7Y32 Tue Apr 5 04:40:18 2011 No.2834526 A quick one before I go: >>2834513 I like the strawman you prop up, and the apparent illusion of being infallible that it gives you. Sure beats actually reading the post you're replying to.

>>	EXeCONMAN Tue Apr 5 04:40:18 2011 No.2834529 >>2834507 Neoclassical Economics would not agree. Which is good, because, in general, Neoclassical economics is worthless.

resident /sci/ economist Tue Apr 5 04:42:18 2011 No.2834536

>>2834523

Happy? "Happy" isnt a term we use.

It covered its costs, thats all a business is out to do. Yes, it prefers to grow, and it will as the economy grows, but a business is only out to cover its costs. That is fundamental to everything I have ever learned in all my economics, finance, and accounting classes.

And I have no problem accepting this, because it makes sense. A business costs money to operate, it generates the revenue to cover those costs. Everyone is happy. Employees and customers.

Its not about if companies are satisfied with covering costs. Businesses regularly go through periods of negative and positive profits. They dont have a say in if they are profitable. They only have a say in whether they should continue to produce.

>>	ActualEconGuy Tue Apr 5 04:42:18 2011 No.2834538 >>2834504 Well, I never.. Oh and intelligents discussing Lebron James. Firms are owned by households... He's a consumer in the goods and services market and a producer in the basketball entertainment market.

Anonymous Tue Apr 5 04:42:18 2011 No.2834541

>>2833535
>>2833541
what changes on the sellers side to agree to lower the price.
>>2833555
why does the producer produce less?

Because Capital wants to go where it has the greatest Utility. why turn capital and resources into something people are not wanting. long term the price will return to where it was as contracts run out and capital is free to go to better(demanded) production. now as the short term. many times the immediate lowering in price is because the desire to get back some of the capital invested to move on to greener pastures.

you do a math equation in your head(or in excel). how much is the capital worth to me? If I lower prices first and clear out of the market and take my money elsewhere. How much can I make until everyone else get on the new band wagon. If the profits greater then the loss on liquidating. then by all mean. lower your freaking price.

don't forget to factor in contractual and new market barriers.

EXeCONMAN Tue Apr 5 04:43:18 2011 No.2834544

>>2834526
pls2 identify strawman?

I can state it so that even you can understand (I think)

demand curve doesn't care about the incomes of the people who make it up

doesn't matter if one person is rich or everyone is even.

Demand curve doesn't represent anything about distribution, but it does carry purchasing options.

Just because economy is at equilibrium in neoclassical model, doesn't imply any particular distribution of goods

again, post without stating any ideas. Try to nitpick something I say to win points in an argument. Not worth talking about.

>>	Anonymous Tue Apr 5 04:44:18 2011 No.2834547 File: 244 KB, 835x1310, trillion.jpg [View same] [iqdb] [saucenao] [google] >meanwhile in america. what does it say about your theorycraft jew cosplay?

>>	ActualEconGuy Tue Apr 5 04:44:18 2011 No.2834550 >>2834523 Perfect competition is Pareto optimal. They earn zero ECONOMIC profit, not zero accounting profit. They can be covering they're huge ass opportunity costs. Firms aren't profiting as much as you think, although that is the goal.

EXeCONMAN Tue Apr 5 04:45:18 2011 No.2834557

>>2834538
Firms are owned by households

>lulz.jpg

Firms are owned by a small group of elites. The 'households' nonsense is a perfect example of neoclassicals completely ignoring distribution.

If anyone gets anything from these posts, I hope it is just to challenge the nonsense you're told in class. I'm going to bed soon

resident /sci/ economist Tue Apr 5 04:48:18 2011 No.2834563

>>2834557

First of all, elites are house holds.

Second of all, corporations, which I presume are a majority of the firms we refer to, are owned by shareholders, which can be anyone.

If its not a corporation, its presumably small, still owned by house holds, and is not owned by elites.

EXeCONMAN Tue Apr 5 04:49:18 2011 No.2834567

>>2834550
perfect competition is nonexistent

Also, guy who knows about econ should know that there's no well defined 'socially optimal' actual profit level in this equilibrium.

I don't mind new thread, but if you know anything about econ, you know that distribution is not covered. I think i'm pretty much done with that

>>	Anonymous Tue Apr 5 04:49:18 2011 No.2834568 File: 15 KB, 190x240, Krugman_New-articleInline.jpg [View same] [iqdb] [saucenao] [google] >hai guize I broke a window now the economy is better off

ActualEconGuy Tue Apr 5 04:49:18 2011 No.2834569

>>2834557

Is that a joke? If firms aren't owned by households, then they must be owned by aliens from another galaxy, or perhaps jungle ants or how about monkey robots? Shareholders actually own a lot of the firm, which is distributed among a wide range of households. And even the "small elite" are people too, they got homes, homes.

EXeCONMAN Tue Apr 5 04:50:18 2011 No.2834574

>>2834563
>can be
>implying that this is the case

I'm not going to bother anymore. You know and I know that the profits from business do not flow seamlessly into households. They flow into the pockets of the elites that hold them.

Neoclassical models do not deal with distribution issues. They are assumed to be non important and are not modeled.

>facepalm.jpg

>>	EXeCONMAN Tue Apr 5 04:52:18 2011 No.2834579 >>2834569 point was that 'households' is not a homogenous group of individuals, but is a small subsection of the economy. distribution distribution distribution distribution >if you don't get it, you're not going to.

>>	Anonymous Tue Apr 5 04:53:18 2011 No.2834583 File: 15 KB, 458x548, bastiat1.png [View same] [iqdb] [saucenao] [google] >>2834568 Une petite conversation me semble nécessaire, mon cher monsieur.

resident /sci/ economist Tue Apr 5 04:53:18 2011 No.2834584

>>2834574

Youve been repeating this stuff about neoclassicalism and distribution, which has never had anything to do with this conversation.

You want to complain about income disparity? FINE, thats a great conversation, but dont muddle it up in this conversation about other things, like whether or not businesses will continue operating when they make zero profit

ActualEconGuy Tue Apr 5 04:53:18 2011 No.2834587

>>2834567

Then every single specific market is non-existent. Don't use a general term like oligopoly please because that's not a specific market.

Types of markets are categorized of where they sit on the domain of number of firms. dom: 0-inf

as number of firms approaches infinity, it becomes PC, as number of firms approach 1, it is a monopoly, and it approaches zero, there is no market. Anything inbetween 1 and infinity is an oligopoly.. etc etc etc etc etc

>>	EXeCONMAN Tue Apr 5 04:56:18 2011 No.2834592 >>2834584 dont muddle up the conversation about distribution by talking about distribution only thing ive been talking about the whole time was neoclassical model failure. ITT: i'm victim of trolls D: enjoy your evenings, gentlemen.

>>	ActualEconGuy Tue Apr 5 04:57:18 2011 No.2834595 >>2834592 Doesn't matter what anyone says, you're just looking for an argument. You're utility function favours arguing over having a normal conversation.

>>	None !DM1NIGGERo Tue Apr 5 04:58:08 2011 No.2834597 HELP 404 THE BULLSHIT!

>>	resident /sci/ economist Tue Apr 5 04:58:18 2011 No.2834598 >>2834592 The first time I said distribution was last post. There was no reason to start a conversation about distribution with me. I only started talking to you about prices and costs and profit when you started correcting me.

>>	None !DM1NIGGERo Tue Apr 5 05:00:08 2011 No.2834602 File: 6 KB, 279x267, 1298866207342.jpg [View same] [iqdb] [saucenao] [google] HELP 404 THE BULLSHIT!

>>	Anonymous Tue Apr 5 05:04:18 2011 No.2834609 >>2833588 DERP curing all cancer is impossible curing HPV related cancer's will be easy because we've already done it

>>	m1ckey !dkJI/P7Y32 Tue Apr 5 05:51:18 2011 No.2834710 >>2834544 Still strawmanning, eh? Who the hell said that the demand curve in particular was used to evaluate inefficiencies? We were talking about the supply curves as well, obviously. And the strawmen in your posts are very clear.

>>	EconGuy !!d2Pzyp675d3 Tue Apr 5 10:21:18 2011 No.2835387 >>2834538 Not sure who this guy is,but it isnt me.

>>	Anonymous Tue Apr 5 10:25:08 2011 No.2835394 buy silver, niggers. double niggers, you buy gold.

EconGuy !!d2Pzyp675d3 Tue Apr 5 10:26:18 2011 No.2835398

Anyway, quick statement to the rest of /sci/

You either need to accept econ for this board, or support us getting our own board. If you constantly shit up the econ threads, troll econ threads are going to start popping up.

Personally, I would be extremely happy with an econ/finance board.

>>	Anonymous Tue Apr 5 10:27:08 2011 No.2835402 >>2835398 thats one vote for double nigger.

>>	Anonymous Tue Apr 5 10:59:18 2011 No.2835491 >>2835398 I, for one, support this

>>	Anonymous Tue Apr 5 11:04:18 2011 No.2835501 >>2835398 Bad Idea: all the new trolls would start posting there whenever there's any "news" about the economy.

>>	Anonymous Tue Apr 5 16:27:18 2011 No.2836795 File: 82 KB, 720x540, 1288970997710.jpg [View same] [iqdb] [saucenao] [google] We need a Finance/Econ board!

>>	Anonymous Tue Apr 5 21:19:18 2011 No.2838013 Finance/Econ board, with mods to ban stormfags who might pop up!

>>	Anonymous Tue Apr 5 21:24:18 2011 No.2838041 >>2834501 Political Science major here, but most definitely. I wish this major wasn't so inept at tying itself with game theory. Contracts are interesting as fuck. An aside: Does anyone know any good books on contracts related to economics / law?

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