You want to get the most out of the people you deal with. Prudentially speaking, what’s the best way to treat them? Basic economics has a fairly clear-cut answer: Be negative. If they’re selling you a gourd, say, “What a crummy gourd. Why would I want this piece of junk?”
Isn't this less a distinction between the fields and more a distinction between rewarding people with only money vs rewarding people with non-monetary things? In your example, the economist is only considering the transaction being money based, whereas the psychology answer (and reality) has people exchanging not just money and goods but approbation and other happy feels. As you say, when people like you they want to help you. You could rephrase that as "people want to help you if the think you have good things for them, either money or whatever makes them like you."
Probably the more damning argument against economists is that they only see exchange in terms of money. No enough economists read Adam Smith!
> Probably the more damning argument against economists is that they only see exchange in terms of money
If you only take this post it would seem so, maybe because Bryan is looking for a simple model with an exaggerated distinction between econ and psych. But I think that in general it is quite the contrary. Economists succeed at explaining economics because they know the tradeoffs are not merely monetary (so you can't solve the problems by just issuing money out of thin air), and a bunch of other reasons.
It is possible you spend time with a higher quality of economist than average. My experience in the field is that most economists don't see non-material exchanges as relevant. GMU is unusual in having a lot of economists that take such matters seriously, while most schools seem to run by "if you can't put it in a regression model, it doesn't exist."
I recently bought a car so coming back to the post. Every car salesman must be reading Caplan because they all have pictures of their family, drawings from their kids or grandkids, etc… I’m certain they’re playing to me, since those items are facing me as I sit across the salesperson.
Nonetheless, I generally agree it pays to be nice when negotiating and to think about the whole value chain, not just the sales price. It has served me well in life (except for when negotiating car purchases and my performance bonus!)
Ok but what about abusive and manipulative relationships? Aren't they places where the econ view works to extract maximum value in personal relationships?
What a crappy article, you could have done better!
But, you are my favorite economist and I adore your style.
That's covering my bases.
Isn't this less a distinction between the fields and more a distinction between rewarding people with only money vs rewarding people with non-monetary things? In your example, the economist is only considering the transaction being money based, whereas the psychology answer (and reality) has people exchanging not just money and goods but approbation and other happy feels. As you say, when people like you they want to help you. You could rephrase that as "people want to help you if the think you have good things for them, either money or whatever makes them like you."
Probably the more damning argument against economists is that they only see exchange in terms of money. No enough economists read Adam Smith!
> Probably the more damning argument against economists is that they only see exchange in terms of money
If you only take this post it would seem so, maybe because Bryan is looking for a simple model with an exaggerated distinction between econ and psych. But I think that in general it is quite the contrary. Economists succeed at explaining economics because they know the tradeoffs are not merely monetary (so you can't solve the problems by just issuing money out of thin air), and a bunch of other reasons.
It is possible you spend time with a higher quality of economist than average. My experience in the field is that most economists don't see non-material exchanges as relevant. GMU is unusual in having a lot of economists that take such matters seriously, while most schools seem to run by "if you can't put it in a regression model, it doesn't exist."
OK, I get what you mean. But I guess that has more to do with laziness with regards to stuff that is more difficult to measure.
I recently bought a car so coming back to the post. Every car salesman must be reading Caplan because they all have pictures of their family, drawings from their kids or grandkids, etc… I’m certain they’re playing to me, since those items are facing me as I sit across the salesperson.
Nonetheless, I generally agree it pays to be nice when negotiating and to think about the whole value chain, not just the sales price. It has served me well in life (except for when negotiating car purchases and my performance bonus!)
Ok but what about abusive and manipulative relationships? Aren't they places where the econ view works to extract maximum value in personal relationships?
Reminds me of George Bush after re-election saying, I earned political capital in the campaign and now I intend to spend it.
With views like this you could become a politician