Re: long-lasting cars
--- Gustavo Lacerda (from work) [EMAIL PROTECTED] wrote: By (P1), producing long-lived cars could result in smaller profits (this would happen in the form of fewer sales). Thus the interests of the manufacturer could be in opposition to the interests of the consumer (this reluctance to change production would be held up by collusion with the other manufacturers). Does this make sense? No. There would be a profit opportunity for a company to make long-duration cars, and eventually only those would be produced. It is technically possible to make cars that deteriorate in one year, but we don't see these in the market today. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Movies - coverage of the 74th Academy Awards® http://movies.yahoo.com/
Re: growth in the past 20 years
--- Chirag Kasbekar [EMAIL PROTECTED] wrote: Anybody willing to pick holes in this one? The Mirage of Progress The past 20 years have been an abject economic failure for most countries, In fact, during the past 20 years, some economies (Hong Kong, Taiwan) have grown rapidly while others (Argentina, Zaire) have sunk into decay and poverty. So global averages don't provide any insight. The project Economic Freedom of the World demonstrates what theory also concludes, that economies with more economic freedom have greater growth. So it is not trade but domestic interventions that keep economies poor. See http://www.freetheworld.com Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - live college hoops coverage http://sports.yahoo.com/
Re: MBA's for senior exec's
Why do older executives desire MBA's or B-school Ph.D.'s? Fabio For the same reason most investors need an advisor - for discipline. Old dogs do need to learn new tricks, and the execs could do so on their own, but but most don't have the discipline to do it alone. By taking a class, they put structure into their lives so they have to go to class and do the work. If they just read books or went to seminars ad hoc, they would keep putting it off, since the important but non-urgent tasks tend to get postponed. The degree is then just icing on the cake. In short, taking a class puts the learning into the category of urgent, so it gets done. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - live college hoops coverage http://sports.yahoo.com/
Re: Campaign finance changes
The real problem is not how to get money out of politics but how to get politics out of money. Alex For my analysis of how to do this, see Recalculating Consent at: http://www.gmu.edu/jbc/fest/files/foldvary.htm Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Try FREE Yahoo! Mail - the world's greatest free email! http://mail.yahoo.com/
Re: privatize parking spaces - market failure?
--- Gustavo Lacerda (mediaone) [EMAIL PROTECTED] wrote: What if you're parked at home, and there is an unexpected shortage of spaces? If you are at home in your garage or driveway, there is no parking meter charge. But if you are in front of your home in a public street with meters, then, yes, you pay the current market rate. It is not your property. If you're surprised by an $800 charge for an unusually tight night, You need not be surprised if you check what the current hourly rate is. If you leave your car for long periods of time without checking the rate, yes, you could be surprised by the bill, but then you should know in advance that you are vulnerable to a variable charge. Metered parking is supposed to be short term. If you want to park for a long time, either park in your driveway or go to a parking lot or parking structure where they have fixed rates. Your example is extremely unlikely, since at night there is usually plenty of parking. (A) A system in which the driver gets a short-duration, (say 24h or 10h, it's the driver's choice) lease for the spot. The price for available spaces fluctuates, but once you park (i.e. sign the lease), the terms of the lease become fixed. That would be fine for a parking structure. But street parking requires availability, which is best met with a dynamic fee that eliminates congestion. Street parking is meant for short periods of time. High rates imply that is what folks are willing to pay. If you are not willing, don't park there. Continuously high rates become a signal to provide more parking. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - Coverage of the 2002 Olympic Games http://sports.yahoo.com
Re: privatize parking spaces - market failure?
--- Gustavo Lacerda [EMAIL PROTECTED] wrote: Are you suggesting a system that is sensitive to the market conditions at the exact moment in time (i.e. dynamically priced)? Yes. but such a system would be hard to implement. The technology already exists. Can you think of an existing analogous system in a similar market? Toll roads that charge according to how much congestion there is. Computer systems where users bid for time. Any kind of auction system for renting a resource during some time. Would there be a bound to the charge per time? No. The charge should be just high enough to eliminate congestion so that there is usually a parking space within one or two blocks. The parking spaces would be more attractive if they offered some sort of guarantee. The guarantee is to be able to find a space. That is what the parkers would pay for, the highest bidders getting the space during those times. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - Coverage of the 2002 Olympic Games http://sports.yahoo.com
Re: privatize parking spaces - market failure?
--- Gustavo Lacerda (mediaone) [EMAIL PROTECTED] wrote: What if cities decided to privatize on-street parking spaces? I imagine that this could be a market failure in mixed residential-commercial neighbourhoods. The reasoning is that most cars spend the night at residences and the day at business locations. The market solution would be electronic parking meters that flexibly charge just enough to avoid congestion at any time of day or night. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - Coverage of the 2002 Olympic Games http://sports.yahoo.com
Re: The Economics of Military Stop-Loss Policies
--- Strobl Maj Michael R [EMAIL PROTECTED] wrote: The military's current stop-loss policy prevents certain service members from leaving the service at the end of their normal enlistment contract. Question: when one enlists today, is it clear in the contract that the enlistee may be subject to stop-loss? Was stop-loss in the contract in the past, when those now subject to that policy enlisted? If the stop-loss policy was not in effect, and if the contract did not provide for this policy, then yes, it acts as a draft. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Send FREE Valentine eCards with Yahoo! Greetings! http://greetings.yahoo.com
Re: drink prices
(1) Where else do people buy things without knowing the price first? Hotel phone calls. Also, in restaurants people often order drinks before they see the menu. Prof. Bryan Caplan There are also many situations where the price can change, and alter prior price agreements. Suppose you hire a carpenter to fix a stairway. He quotes you a price. But halfway thru the job, the carpenter discovers rotten pieces that were not previously known, that have to be replaced, and the price increases. You have already contracted and paid some of the expenses; most folks will just go along with reasonable price changes. So often, in such cases, we really don't know the final price. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
--- Ole J. Rogeberg [EMAIL PROTECTED] wrote: A problem with Fred's solution is that the most obnoxious spammers would probably set their field to the non-spam when they sent out spam, But if it were illegal, with stiff fines, for a spam message to have the field set as non-spam, that would decrease the volume. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
--- Eric Crampton [EMAIL PROTECTED] wrote: While we're at it, why don't we make it illegal for people to kill each other. If it were illegal, with stiff fines, we'd surely get rid of murder. Do you deny that we have less murder with laws penalizing it than if we had no such laws? If so, do you wish to eliminate all criminal codes? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
AOL is the most popular ISP (I think) and Hotmail must be up there in popularity for email accounts- and this is the case even though those two are notorious for giving out their banks of email addresses to spammers. In addition, selling these names is good because it makes the service cheaper- you may not like spam, but you do like a free email account... Jason Hotmail is free to email users, but they can also designate a junk-mail filter level, which puts spam in a junk-mail folder, which is eventually deleted if the user does not. The Yahoo site gets a lot less spam, in my experience. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
What about e-mail spam? The technology seems to prohibit an effective ban on spam, yet neither an economic nor legal solution seems available. Any thoughts on whether spam can be reduced via some sort of economic or technical mechanism? Fabio I don't have specific expertise on email technology, but as one who has done computer programming, it seems to me that the simple solution is to require a field in the email headers that would be set to 1 if the email fits the legal definition of spam and 0 otherwise. Software could then easily handle the spam. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Photographers
for the negatives - but the photographers always react with horror to this suggestion and refuse. Alex Ask them how much is the least they would accept in payment for the negative, before you have the picture taken. Go and ask several photographers. If they say I don't sell negatives, offer $10,000. He will probably say OK. Then tell him you will be asking other photographers, and so, what is the least he would accept? You could also mention that if you can't get the negative, you will scan the photo into your computer. The quality won't be as good as with a negative, and folks might think it is the fault of the photographer. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Only Economists Tell the Truth?
--- Robin Hanson [EMAIL PROTECTED] wrote: Social science would be vastly easier than economists make it out to be if we could usually just ask people why they do things. But economists are generally skeptical of this approach, Social science does have a great advantage over biological-behavior science in that we can ask our subjects of study what they are thinking and feeling. This makes up for not being able to do as extensive experiments on them as do those who study animals and plants. More of this should be done, taking into account the fact that of course people lie to pollsters and also, many folks don't really know why they do many things, at least beneath the superficial reasons. Economists can also figure much behavior out from common observation and introspection. But perhaps a major reason why we don't rely so much on asking, is that economics is more concerned with the means towards goals than on why folks have the goals that they do. We presume the means involve economizing, and then there is really no need to inquire personally beyond that; Max(U) given constraints C does the job, perhaps too abstractly. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Send FREE video emails in Yahoo! Mail! http://promo.yahoo.com/videomail/
Re: The Median Voter Theorem and Adoption Law
--- Bryan Caplan [EMAIL PROTECTED] wrote: I'm highly dissatisfied with interest group explanations. Simple reason: Most of the policies traditionally blamed on interest groups are in fact *popular*. Adoption laws seem like a case where existing policies are not popular, though perhaps I'm wrong on that count. Cato's Policy Analysis 420 (Dec 12, 2001) studied voter initiatives and found that tax-and-expediture limitations passed by voters are more restrictive than such legislation by representatives, and they cause per-capita state spending to decrease. At least in this respect, the interests of the voters do not seem to coincide with the legislation by the reps. Also, it does not seem to me that if they knew about it, most voters would approve of agriculture subsidies and price supports. Why would the median voter want a higher price for sugar and subsidies for the owners of sugar beet farms? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Send FREE video emails in Yahoo! Mail! http://promo.yahoo.com/videomail/
Re: Austrians and markets
--- Mark Steckbeck [EMAIL PROTECTED] wrote: the recent post by Dan Klein pertaining to changing the name of the school (let's put the old wine in new wineskins) Mark Steckbeck I think your interpretation of Dan Klein's proposal is not what he intended. As I understand it, the proposal is not just to rename the school, but to create a new movement composed of Austrians as well as other pro-freedom scholars not affiliated with Austrianism, but also also not glued to the mainstream formalist methodology. The institutions (societies, journals) would be based some of the current Austrian ones because these are the major free-market ones that currently exist and that could create the basis for the new movement. This would not just be a new wineskin but a new vintage of wine. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find the one for you at Yahoo! Personals http://personals.yahoo.com
Re: Tax with positive growth effect
No, the whole rationale for taxing land value is that it does not matter what the site owner does with the land. What you are proposing is a kind of capital tax. I do not have anything against it, but your face the economic consequences of taxing capital. No, because land is not capital. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
RE: Tax with positive growth effect
--- Alexander Guerrero [EMAIL PROTECTED] wrote: How do you estimante market value? With respect to land value, besides monitoring sales and rentals of undeveloped land or sites such as parking lots, one estimates the cost of replacing the building, subtracts depreciation, and that amount is subtracted from the prevailing market prices in that neighborhood to estimate the land value. and what kind of land you are talking about All land. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
--- Kristjan Kanarik [EMAIL PROTECTED] wrote: Has anybody read/heard about a tax which does have a positive effect on economic growth? Yes. Land-value taxation promotes growth by having less excess burden, and by inducing more productive use of suboptimally used land. You could also force growth by taxing leisure, but that would distort choices and lead to less overall economic benefits. See the book Land and Taxation as well as Land Value Taxation Around the World (Vol 59 (5) supplement, 2000), American Journal of Economics and Sociology). Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: Tax with positive growth effect
--- Alexander Guerrero [EMAIL PROTECTED] wrote: Well before yo tax idle land, you must be sure that the land is wasted, No, the whole rationale for taxing land value is that it does not matter what the site owner does with the land. Those who waste it will have to pay the same rate as those who maximize rental income. And, believe me, this is something which has been always very difficult to assess. How do you know? Insurance companies manage to appraise land value, because they don't want the insured to collect on that if the building burns down. The big question is : Does the land lord like to have idle land? If he does, fine; let him pay for that consumption. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: the justification for urban planning
--- Ben Berry [EMAIL PROTECTED] wrote: Markets ... don't do well in things like supplying housing in proper configurations and locations because housing is a durable good that once sold is relatively permanent (30-100 years or more). It depends on the particular market. If a housing development is owned by a corporation and leased to occupants, then the corporation is able to redevelop it later when demand warrants a higher density or different use. Spencer MacCallulm has written on this, calling such corporate communities entrecoms (forthcoming chapter in a book on policy justification edited by myself and Dan Klein). Since they won't be living in the places more than 5 or 10 years they don't care if the place is ugly to most people or shoddily constructed. The main cause is government. In private community associations there are often covenants that prohibit ugly exteriors. As for shoddy construction, would this not reduce the market value of the building and liability in case of fire or earthquake? On the other hand, cheap construction makes it less costly to tear down and rebuild. Related to this is the famous prisoner's dilemma nobody invests and the neighborhood continues its downward spiral. The dilemma is solved by contractual agreements, such as the covenants of the residential association. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: VS: looking for public choice views on the welfare state
public choice view on / explanation of (the development of) the welfare state. Have you seen: Richard Wagner, To Promote the General Welfare, 1989. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: 2001 Economic Nobelists
Stiglitz would have liked to get the prize for the Modigliani-Miller theorem but that one was already taken. Alex Stiglitz also helped develop the Henry-George Theorem. Joseph Stiglitz, 1977, The Theory of Local Public Goods, in Economics of Public Services. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: Growth, Wealth, and Race
fabio wrote: 2) The real question is whether the current distribution of wealth is typical or not. If you did the same study 1000 AD, would you get the same picture? This is indeed the right question to ask. There seem to be just too many possible explanatory variables and too few independent data points at the moment. The solution: get more data points! Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu The earliest high civilizations seem to have been in the warmer areas: Central America rather than where the US and Canada now are; Egypt and Mesopotamia rather than further north in Europe; India rather than Siberia. Australia had low-tech aboriginies until the Europeans came. A curious aspect of history is how the Vikings evolved from warring invaders to peaceful social Scandinavian democrats. The book and study Economic Freedom of the World indicates that policy is the dominant variable in economic growth; Singapore and Hong Kong rate high even though they are in the tropics or nearby. Fred Foldvary
Re: The paint market
Consumers also derive utility from attriobutes of paint other than simply colour. i.e branding, lifestyle association eg idyllic country cottage lilac etc that may make the price differential justifiable. David Often a professional painter will buy the paint and enter it as an expense, which is a small fraction of the total painting bill, so the painter is not that price sensitive, and prefers a known brand that he is familiar with to a cheaper one even if he thinks it may be similar, so that he avoids any complaints about the paint. The customer will not complain about a few dollars difference in the price of the paint when he is paying $20+ per hour for labor. Fred Foldvary
Re: Growth, Wealth, and Race
Sachs has popularized a strong finding: Distance from the equator explains a great deal of the variation in income *levels* between countries. The further from the equator, the richer countries are. So how do you explain the ancient Mayan, Azctec, Inca, Egyptian, Zimbabwe, and East Indian civilizations? This "finding" seems to be a historical concidence stemming from Europe having firearms and conquering the tropics. Fred Foldvary
Re: Growth, Wealth, and Race
On Fri, 16 Feb 2001, Bryan D Caplan wrote: Circle the globe. The only civilization I can see that ever emerged around the equator was the Inca. And their effective climate was not equatorial due to high elevation, as far as I understand. Most of the equator crosses water, but if you expand the area to the tropics, there were civilizations in India, Cambodia, Bali, Central America, Zimbabwe, and elsewhere, with remains in stone today. What is the source for the statement that the Aztecs had a lower standard of living than the Spanish? Fred Foldvary
Re: More Guns, Less Crime?
On Fri, 19 Jan 2001, Girard wrote: Why not look at the statistics? Here are some : Percent of households with a handgun: United States 29% United Kingdom 1 Murders committed with handguns annually: United States 8,915 United Kingdom 7 Murder rate (per 100,000 people): United States 8.40 United Kingdom 1.97 Who needs long dissertations to prove that guns kill? Nothing is proved. This is post-hoc ergo propter-hoc. Culture is a key variable here. Given the culture, the freedom to defend oneself may well be correlated with lower crime rates. Vermont in the US has the most liberty in self-defense and low crime rates relative to other states. Fred Foldvary
Re: Property values
Anybody know where I might find a time series index of the aggregate value of property in the United States? Eric Crampton Try the Balance Sheets for the US Economy, Federal Reserve Board. Fred Foldvary
Re: Top 10 Economic Puzzles
What are the big unsolved puzzles of economic empirical research? -fabio How much is the total land rent of the United States or any other country, and how much would that rent be if all taxes having an excess burden were eliminated? Fred Foldvary
Re: Periodic redistribution
On Wed, 18 Oct 2000, Daljit Dhadwal wrote: Before the Communist revolution in Russia, around every 10 years(I think) land was equally divided up and distributed to the peasents. Also, under some religions debts have to be foregiven every so often. What's the rationale for this type of periodic redistribution? I'd appreciate a reference for this land redistribution in Russia. Fred Foldvary
Re: This year econ nobel prize?
On Mon, 9 Oct 2000, fabio guillermo rojas wrote: Any guesses on the econ nobel prize this year? -fabio My guess is that it will be James Heckman and Daniel McFadden. Fred (Of course it was easy to guess after the awards were announced.)
Re: Upward Sloping Demand Curves
Very often for water bills, you have to pay more per unit once your consumption goes above a certain level. This might make it seem like the price goes up because your quantity demanded goes up(which reverses the causality) and would mean an upward sloping demand curve. Cyril Morong At a lower price the consume would be willing to buy more water, but the regulated utility is offering the first amount at a subsidy, creating a large consumer surplus. The price only goes up because it is controlled by regulators. In other cases, it is the opposite: large users get a volume discount. Fred Foldvary
Re: Whither Wittmanian Public Choice?
Why does Donald Wittman's (cfr "The mith of democratic failure") arguments are ipso facto ruled out as "naive panglossian view of the markets" by some scholars? Who else is doing political economy work in Wittmanian lines? Who has elaborated the best rebuttal to Wittman? Etch Charles Rowley and Michelle Vachris reubutted Wittman in their chapter on "The Virginia school of political economy" in Beyond Neoclassical Economics, ed. Fred Foldvary (Edward Elgar Publishing, 1996).
Re: Upward Sloping Demand Curves
The Role of Price Endings: Why Stores May Sell More at $49 than at $44 This joint Chicago/MIT study, utilizing a large catalog field test, found that increasing the price of an item from $44 to $49 may actually increase demand of that item (quantity demanded for the anal-retentive on the List) by up to 30%. This paradox is related to the "fact" that $9 price endings lead to favorable customer price perceptions and increased customer demand. However, overuse of the $9 price ending dilutes this effect, as does the simultaneous use of sale signs. J. Morrison Actually, when the greater quantity is bought at $49, it does indeed increase the demand, not the quantity demanded. When the price is raised to $50 from $49, the Q demanded falls. When the price falls from $49 to $48, it is the demand that shifts in, because the perception is that this is a different good. Try to reduce a price of a good that is familiar and has been selling at $49 to $48 and see if the quantity demanded declines. People won't knowingly throw away money unless they enjoy the throwing. Fred Foldvary
Re: upward sloping demand curves
On Tue, 26 Sep 2000, Cyril Morong wrote: My understanding of the upward sloping demand curve is that consumers may be willing to buy more of a product if the price is higher because the higher price may signal better quality. If the perception is that it is of better quality, then it is a different product, and the demand curve, which is for just one product, does not slope up. What about attributes of the product? Isn't that what we really demand? Yes. So the demand curve is for just one set of characteristics. Fred Foldvary
Re: Gas
On Sun, 17 Sep 2000, Bryan Caplan wrote: Where would the supply-side effect come from? Just because the world supply is fixed, does not mean that one country can't reduce after-tax prices by cutting taxes. Inelastically supplied to the world, elastically supplied to individual countries. Prof. Bryan Caplan [EMAIL PROTECTED] If the product we are talking about is gasoline, it seems to me the oil is refined locally with imported oil. If gasoline itself is imported, then yes, the supply is elastic. But if the gasoline is all refined with Japan, then in the short run, if refineries are running at full capacity, it seems to me the supply of gasoline is inelastic, if not fixed. Fred Foldvary
Re: Cafe Free riders
On Wed, 13 Sep 2000, fabio guillermo rojas wrote: Why do cafes allow people to take up space and not buy anything? Cynics answer: cafe's discourage free riders by having small uncomfortable furniture (see Starbuck's on E 53rd in chicago). Not in the Starbucks nearest my house in Berkeley. They even have a sofa and some big soft armchairs. I don't see any totally free riders there, despite its comfortable furniture. Possibly there are free riders who use the bathroom. My guess is the manager does not want to alienate customers who may have gotten food and drink and then tossed the container, but continue to use the table. It's not easy to discriminate among the users, and they do a brisk business anyway. The marginal cost of a sitter is about zero until all the tables are taken, and then social pressure induces greater density, as sitters get asked if they mind sharing a table. The free riding mostly occurs for folks getting one drink and then sitting for a long time. But as long as tables are available, it doesn't matter. Much of the business is to-go, anyway. Lap-top users get electricity at no extra charge, so free-riding has several margins. Fred Foldvary
Re: The Indeterminacy of Individual Economic Actions
What does this say about the economists model of human behavior? -- Bill Dickens "The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior" findings. First, 401(k) participation is significantly higher under automatic enrollment. Second, the default contribution rate and investment allocation chosen by the company under automatic enrollment has a strong influence on the savings behavior of 401(k) participants. These findings do not change the economic model of homo economicus, economizing man. It takes effort and time to make changes and gather information, so inertia is to be expected. Optimality is subjective rather than being based on objective rewards. The reasons for anchoring (being stuck on certain concepts even though not objectively true or optimal) and information bias are the subject area of psychology rather than economics. Fred Foldvary
