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 Originally Posted by MadMojoMonkey
This seems like a naive interpretation of my question, presupposing that everyone who commits suicide thinks it's for the best.
Why would somebody commit suicide except that they think it's for the best? If I remember the history right, one of the breakthroughs in rationality came when Gary Becker (also a Nobel winner) began applying the concept in unorthodox ways. A popular example is heroin addiction. Despite all the drawbacks of shooting up again, if an addict decided to shoot up again, he still acted in such a way that reflects what he wanted the most. Even though it was unwise and even if his decision was influenced by other factors, he still shot up the heroin because he wanted to do so more than he wanted to not do so.
Or at best, it strips the definition of utility down to a wholly subjective meaning, which cannot be objectively evaluated to predict behavior.
Yeah the base assumption is not testable. Many models that go beyond this basic assumption are testable though. I don't know much about the various models. The Kahneman example appears to be one where he challenged one of the more popular models, showing ways in which it is flawed. Or something to that effect.
The point of economics is still to make predictions, yeah?
Sorta. Predictions are involved in the scientific method, but the point of economics still is just description of production, distribution, and consumption of goods and services.
How does this definition of utility support your ability to make predictions?
I'm not sure if I can answer this. My guess would be that it gives direction and provides sense to interpretations. For example, if you assume that people have a statistically related chance of eating burgers when they want to eat burgers, you're in a more sensible spot than if you assume that there is no correlation between desire to eat burgers and burgers eaten. I don't think I know enough to answer this question though.
How do you explain self-destructive behavior? People do things which are actively done because of the anti-utility, right?
If I didn't already, I would use the heroin example. If that explanation doesn't make sense, let me know and I'll try harder.
The short of it is that when you do something, you do it because you want to do it more than you want to not do it. An alternative would be something like "decisions are random" or "people do what they don't want to do."
Confusion can arise because of interpretations of "want." Let's say you have an alcohol problem and you want to quit. You can think of many reasons: it makes you feel worse, you're not sleeping well, you're losing your senses, you're wasting money, etc.. These are all reasons that make you want to not consume that next drink. But then there are other reasons that make you want to consume that next drink: you're in withdrawals and feel like shit, you're used to it, you don't want to change, your dopamine is in the tank and you're jonesin' for that immediate pickup on the first sip, your stress is racking up and you just want a stress free night, etc.. Well, economists say that if you chose to have the drink, you did it because it is what you most wanted when all these sub-wants were weighed. Even though at the time you could be thinking that it's a terrible decision and you're ruining your life, your brain thought, for whatever reason, that the marginal utility of taking that drink was better than not taking it.
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