When the Dollar Bill Comes Due

[Lawrence of Arabia]

they are being rational. the label 'french' is worth more to them then the difference in prices.

[grumbler]

Originally posted by Lawrence of Arabia
they are being rational. the label 'french' is worth more to them then the difference in prices.

I think you need to look up the word "rational." It does not mean what you think. Valuing a word on a label in not rational, it is emotional (and understandable and part of my point).

[Imran Siddiqui]

I think you are using a different definiton of rational. In economic terms, rational means people will buy what they value more, whether it be because of prices or emotional reasons. So a rational actor may by Coke rather than RC Cola because 'Coke' has more value to him.

It's a different definition of rationality.

[Lawrence of Arabia]

are you not talking about the field of economics definition of rational?

[Kidlicious]

Originally posted by Imran Siddiqui


So if, say, Japanese cars become more expensive, you don't think American cars will sell more? Come on... the resources are there to be utilized, however, because of relative prices, it isn't worth it.

The resources are mostly already being used elsewhere. Some will be realocated to automobile manufacturing, but the overall effect is more inflation and not much overall production until the constraints are allieviated.

[Kuciwalker]

Originally posted by grumbler
I think you need to look up the word "rational." It does not mean what you think. Valuing a word on a label in not rational, it is emotional (and understandable and part of my point).

Rationality refers to what you do with your emotions. Your emotions are what provides the values for various choices between which you use your rationality to decide.

When you say someone's value on something is "irrational" you really mean "it's not the value I place on it"

[Imran Siddiqui]

Oh really... so where are these resources being used that they can't be diverted? You don't think car makers can quickly (like within 6 months) increase production if the market improves? What planet do you live on?

Look at the example of the Honda Odessey. When it first came out, it was impossible to get one in your color within 2 months of putting the order in. 6 months to a year later and they are all over the place to take advantage of greater than anticipated demand.

[Kidlicious]

This is an econ thread folks. Use econ definitions. Rational is seeking pleasure and avoiding pain.

[Kuciwalker]

And pleasure is determined by emotions.

[Kidlicious]

Originally posted by Imran Siddiqui
Oh really... so where are these resources being used that they can't be diverted? You don't think car makers can quickly (like within 6 months) increase production if the market improves? What planet do you live on?

We aren't just talking about one industry. We are talking about a general increase in import costs. Anyway, one industry isn't going to start building factories right away anyway. It takes almost six months to decide to build the factories alone. Companies don't react to short run prices like that. Expansion decisions are based on long range forecasts.

[Kidlicious]

Originally posted by Kuciwalker
And pleasure is determined by emotions.

We don't care about emotions in econ though. We only care about "rational" as we define it.

[Kuciwalker]

And rationality is based on value is based on emotion. Ergo you do care about emotion.

[Kidlicious]

Originally posted by Imran Siddiqui
Look at the example of the Honda Odessey. When it first came out, it was impossible to get one in your color within 2 months of putting the order in. 6 months to a year later and they are all over the place to take advantage of greater than anticipated demand.

That's different. That's a strategy that companies use to sell the maximum amount of product and to stimulate interest.

[Kidlicious]

Originally posted by Kuciwalker
And rationality is based on value is based on emotion. Ergo you do care about emotion.

I'm not emotional about eating a Snickers bar. That's why we use the word "pleasure" not emotion.

[Kuciwalker]

I'm not emotional about eating a Snickers bar.

Yes you are.

That's why we use the word "pleasure" not emotion.

Pleasure is based on emotion.