· Decisions are about more or less, not all or nothing
o Without the margin, “selfish” is hard to define
· Things that are scarcer are typically more desired
o We appreciate them more when they’re not found consistently
· Example: Athletes vs. Teachers
o Teachers help society more, but athletes are paid more because their skills are rarer to come by
o Also, teachers far more abundant that athletes
o If teaching was as hard as being, say, an NBA basketball player, teachers would most likely be paid more
· Value arise from human interpretation, not reality
· Sunk costs: resources that are not recon
o You make bad economic decisions when you consider sunk costs
o You make good ones when you ignore them
· Humans act with purpose
o We tend to act in ways that ease burdens and make life simpler
o People respond to incentives (behavior changes when the benefits and costs change)
o Law of Unintended Consequences: Because we naturally respond to incentives, often there are unanticipated effects in decisions
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