42 sats \ 3 replies \ @cryotosensei 18 May \ parent \ on: Time Preferences and Life's Curve Balls culture
Another example would be sats earned through referrals vs sats grinded through V4V. Free sats just hits differently.
Why don’t some economists make this distinction, though? Because rationally speaking, we should just examine the features n attributes of the good itself?
we should just examine the features n attributes of the good itself
Basically this. There are really esoteric philosophical reasons for taking one of these views over the other.
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How do they account for the irrationality of the human mind, then?
For example, I might choose high time preference n splurge on a more expensive gift card with my free sats. whereas check out the price a couple of times before I commit to buying a gift card with the sats I earn through blood sweat n tears haha
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That's not handled well by the mainstream of the profession. Although, behavioralists would probably say that you're using simple heuristic rules to reduce the complexity of your personal finance problem.
The Austrian tradition allows for you to view your free sats as a different good than your earned sats, similar to the example I gave with water.
There are only a few strict rationality assumptions that are fundamental to economic theory. We basically just require that people can state which thing they prefer when presented with two options.
Some particular theoretical results may rest on other simplifying assumptions. For example, if you view A>B and B>C, then you must view A>C.
I think people are often surprised at how minimal the assumptions in economics really are.
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