|
Register | Sign In |
|
QuickSearch
Thread ▼ Details |
|
Thread Info
|
|
|
Author | Topic: Economics: How much is something worth? | |||||||||||||||||||
Jon Inactive Member |
And yet aside from telling everyone that they dont understand, you yourself offer no concrete plan or solution to the status quo. Listen, Phat. If you want to reply to my posts, then at least have the decency to bother reading them. If you cannot even accurately portray the part of my posts that you quote, don't expect me to waste time responding to any of the rubbish you have to say. I don't have time to discuss with someone who is arguing against me about something I never even said.Love your enemies!
|
|||||||||||||||||||
Jon Inactive Member |
Percy in Message 1 writes: In economics the question "How much is something worth?" has a simple answer: what someone is willing to pay. And here's you after arguing for who knows how many posts:
Jon in Message 264 writes: First, value determines willingness to pay (WTP), willingness to pay determines how much a firm can charge for its goods or services. Priceless! Of course what you said in message 1 is not the same thing as what I said in message 264. Read closely: value determines willingness to pay. It does not say: value equals willingness to pay. And if I ever made any comment similar to that second one, it was most certainly in error. To better understand how I view the relationship between value and WTP, just read my posts. Love your enemies!
|
|||||||||||||||||||
Jon Inactive Member |
Someone who doesn't shop much might not know the value of a bag of peas, Of course they will. They just won't know the usual price of a bag of peas, nor will they understand the purchasing power of the money they have. But they will still have a very clear idea of how much stuff they are willing to go without in order to own a bag of peas. Would they give up their house? No. Their car? No. Ten minutes of their time performing work? Perhaps. Now, obviously since they do not use money for making purchases very often, they won't have a good sense of how to translate all that into dollars and cents. That doesn't mean they don't know the value of a bag of peas.
If you need to know the value of something rare like a flintlock from the early 1800s then you need someone who knows the prices at which such rare items change hands (an expert for lack of a better name), and it is those prices that determine value. No. If you need to know the value to someone else of something rare like a flintlock from the early 1800s then you need to ask someone else or someone who specializes in knowing what value collectors place on items such as early 1800s flintlocks.
Technical definitions involving marginal utility and so forth have analytical value because they can be plugged into equations and used in economic models, but people aren't usually very analytical about purchasing decisions until the prices get interesting. What 'technical definitions'? The values used aren't thought up in a stuffy room in the basement of a university building. The value people place on things is measured by observing how people place value on things. So to say that these measurements cannot be relevant or meaningful because people don't behave in the manner they describe is nonsense. Obviously people behave in the manner described because the manner described is found out by actually watching people behave.
In most day-to-day life very little thinking goes into purchasing decisions. Of course, because people know the value they place on things intuitively, so they don't have to think about it.
I need gas to get to work, so whatever the price of gas is today, that's what I pay. And when gas was cheaper I needed gas for joy riding... but I don't do that anymore. Funny. You would have thought that as the price of gas went up, the value I placed on using gas (joy riding, for example) would have increased as well. Of course it didn't. The value I place on joy riding has remained relatively unchanged and so as the price of gas increases above and beyond the value I place on joy riding, I consume less gas. This should be easy enough to figure out, of course, because its reflected in the classic supply/demand curve everyone learns in Econ 101.
Analytical economists can claim that the price I paid exceeded the value I assigned, but nothing like that was going on in my head, Of course not. Because by the definitions that economists use in describing value, the price you pay always has to be at least somewhat less than the value you assign. If you pay $300/gallon, then the economist will tell you that you value gas at at least $300/gallon. That is how economists figure out what value people place on things: by watching their consumption behavior.
they find that such simplistic models, convenient as they are, only capture part of what is really going on. Huh? Those 'simplistic models' are constructed around data collected from 'what is really going on'.
For some goods increasing price can actually increase sales. Yes. And I already addressed that. People can consider price in determining their value of things, just like they can consider the quality of the pain reliever, the utility of the plastic bottle it comes in, the color of the picture on the box, and so on. I have never once said that people cannot consider price in determining value. Obviously people can consider whatever the hell they want.
I think the biggest problem we've had in this thread is an insistence that one's position is correct to the exclusion of any other position, no matter how minor the differences might be. Your position might be right, it might be wrong. Some things you've said are right. Some things are just nonsense. Unfortunately, you've been jumping all over the place so much that it's been impossible to really figure out what your actual position is.
I wish we could have had a more enlightening discussion. I feel very enlightened. JonLove your enemies!
|
|||||||||||||||||||
Jon Inactive Member |
Either our hypothetical non-shopper has just violated your inviolate rule, or he has adjusted his internal sense of value to better accord with the prices actually being charged. Or, he always did value peas and other frozen vegetables at at least ten minutes of work. And that is what any honest economist will tell you.
I can see how someone still trying to find infinity on the supply/demand curves might think this. Huh? If infinity doesn't exist on the supply and demand curves it is only because infinity doesn't exist in the real world of people making efforts to satisfy their wants and needs. And economics deals with the real world.Jon Love your enemies!
|
|||||||||||||||||||
Jon Inactive Member |
Interesting. Is it your view that nothing ever affects the values an individual assigns to things, and if not, what are the circumstances under which they would change? Obviously that's not my view, since I've mentioned elsewhere some of the ways to make people value things more. In Message 206, I mentioned that increasing the perceived benefit a product has to consumers is one way to raise the value of something. You also made a similar claim in Message 251. Super peas with the power to bestow immortality would have a much higher value than regular peas.
Value in use assigns an infinite value to air. Let us know when you find infinity on the demand curve. Let me know when you find people in possession of an infinite quantity of goods to exchange for air. Econ 101. JonLove your enemies!
|
|||||||||||||||||||
Jon Inactive Member |
In Message 206 you emphasized that for you scarcity increased price, not value, but now you're saying it does increase value. No I am not. You clearly failed to locate the relevant portions of the message I quoted. So here they are:
quote: Jon, you're right, it's ridiculous, but that's the position you took. No it's not.
I quoted the definition in this very thread, but there you were several posts later arguing that value in trade is useless and that only value in use made any sense for setting the demand curve. And value 'in use' is the type of value that influences the demand curve by determining WTP (an at least measurement of the value consumers place on the goods, services, and resources that they consume). Just look up utility on Wikipedia. This is what it'll tell you:
quote: There's that phrase again, willingness to pay. Let's see what it really means:1
quote: That last part is important. While people may infinitely value something such as air, their WTP will never be infinite, since WTP is 'constrained by an individual's wealth'. Which is (just one of the reasons) why, as I've said repeatedly in this thread WTP is not equal to the value people place on things. In fact, this is what I said in the very first post I made in this thread:
quote: And again in Message 49:
quote: So what I'm saying now is same thing I've been saying all along. If you want a consistent story out of me, just read my other posts in this thread!
But please, whatever you decide to answer, try to make sense. Honestly, if the above still doesn't clear things up, then I'm prepared to declare further conversation on this matter between you and I a lost cause. Jon__________ 1 To be clear, I think everything in that Wikipedia article past the part I quoted is hogwash. Love your enemies!
|
|||||||||||||||||||
Jon Inactive Member |
I understand your point that WTP will always exceed value. If after everything that I've posted you honestly believe that this is my point, then I really don't think there is much more for us to say to one another on this matter.Love your enemies!
|
|
|
Do Nothing Button
Copyright 2001-2023 by EvC Forum, All Rights Reserved
Version 4.2
Innovative software from Qwixotic © 2024