Submitted by TheRealHowardPotts t3_znnbux in BuyItForLife
SoItWasYouAllAlong t1_j0pj260 wrote
Reply to comment by WhiteWingedDove- in 15 Years of almost daily use and still going strong , I present to you the Toyota of Backpacks by TheRealHowardPotts
That would be an attempt of using the map to reason against the realities of the terrain.
I'm not an economist, but here's my attempt at describing it in my own words: Microeconomics has an extremely simplified model, which works reasonably well for the purposes it is designed for: Individuals' market behavior, parameterized by few key quantities of the market environment. The dynamics of the collective market environment (simplified to a few key quantities), as a result of individuals' market behavior. But that's all. It says nothing about e.g. whether, when times are good, the owner of a small private business will size bonuses based on the bare minimum which maximizes expected future return, or be generous for emotional reasons.
> In reality, every decision is a decision where the "bottom line is at stake."
That goes directly against my personal experience of businesses' (of various sizes) day-to-day operations. Also, microeconomics assumes "rational actors", not omniscient or internally efficient. It doesn't model the internal dynamics of a business, just its behavior on its external "market" interface, based on available information. E.g, in the same circumstances, on the inside some try to formalize a perfect methodology and avoid disruptions. Others try to build agility and foster disruptive patterns. That aspect of a business is outside the scope of microeconomics.
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