tag:blogger.com,1999:blog-4509173218981631666.post8525607304274204904..comments2023-11-05T07:47:39.708-05:00Comments on The Blog of Diminishing Returns: All the Coffee You Can Drink for $1, not going to happenSeth Gitterhttp://www.blogger.com/profile/05419336947867237619noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-4509173218981631666.post-1739995576116484362008-01-25T08:51:00.000-05:002008-01-25T08:51:00.000-05:00Some interesting thoughts on rules. Sometimes we ...Some interesting thoughts on rules. Sometimes we construct too narrow of a person with our homo economicus. Seth and I were recently in Florida for his grandfather's 90th birthday celebration. I visited a Starbucks that I will, in all liklihood, never have the opportunity to return to. So, why did I tip the barista? I already had my coffee and there was nothing the barista would ever do again for me? Had I violated the rational man idea?<BR/><BR/>Not really. I think in economics we do not get into the idea of more complicated utility functions at the undergraduate level. We should. My utility depends not only on my coffee (uhhhhhmmmmm. Starbucks.) but the utility of others. I feel better knowing that I have given a tip and helped someone who is making an effort to earn a few bucks at Starbucks. They seem to be pleased with my tip and their happiness enters into my utility equation as well. <BR/><BR/>So, Seth's rules may seem a bit irrational if we look at the simplest version of homo economicus, but perhaps a more detailed presentation of utitlity would show him to be quite rational after all.<BR/><BR/>DadBob Gitterhttps://www.blogger.com/profile/14044726462116314459noreply@blogger.com