Tuesday, January 21, 2020

Micromotives and Macrobehavior Essay -- essays research papers

Micromotive is the inner motivation that leads us in performing particular acts. Those decisions are to pursue peoples’ own self interest, unintentionally lead to contradict with other people’s acts. Chasing that idea of human nature T. Shelling gives us variable results of how micromotives can guide the society in the world of externalities. Economists tend to rely on A. Smith’s â€Å"Wealth of nation† where he talks about invisible hand theorem† according to which people seek to promote their own self interests in the society and also promote the interest of society. (McConnel, B.). Schelling in his paper presents things from different angle. He convinces us that individual actions can lead to surprising results as an aggregate. In our society people selfishly follow their own interests not considering the results those may have on others: either positive or negative. For instance Wright Brothers have invented the first airplane. That is a great example of positive spillover. Inventers chase their own interest on the first place, but in the long term they have contributed into societal progress. Therefore now we can get to the destination faster and easier. An example of negative externality is someone who refuses to pay the taxes to the government. To save money acts on his own interest behalf, when at the same time his action doesn’t benefit societal â€Å"bank†. That behavior could decrease future potentials for societal development if left ungoverned. Shelling introduces coordi...

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.