Sunday, November 18, 2007
exams come first. everything else comes second.
sorry.
and i cannot resist the urge to blog. haha. oops.
Some lessons from econs!
1) The Time-Inconsistency Problem
People often have a plan that we know will produce a good outcome in the long-run, but when tomorrow comes, we just can't help ourselves and renege our plan because doing so has short-term gain.
E.g. We make a new-year's resolution to go on a diet, but soon after, we can't resist taking another bite of that ice cream, and again and again.
So we find ourselves unable to follow a good plan over time. Thus, we need a behavioural rule to stop us.
2) Reverse causation
According to a Russian folk tale, there was once a severe epidemic in the Russian country-side and many doctors were sent to the towns where the epidemic was at its worst. The peasants in the towns noticed that wherever the doctors went, many people were dying. So to reduce the death rate, they killed all the doctors.
Were the peasants better off? Clearly not.
Correlation does not imply causation.
1:36 PM
