7 ms·
An economist and a normal person are walking down the street together. The normal person says “Hey, look, there’s a $20 bill on the sidewalk!” The economist rep
by milcron 9y ago
An economist and a normal person are walking down the street together. The normal person says “Hey, look, there’s a $20 bill on the sidewalk!” The economist replies by saying “That’s impossible- if it were really a $20 bill, it would have been picked up by now.”
- Berobero 9y agoThis quiq seems to support the original posters thesis, though, no? No one's going to make a living wandering the streets in search of $20 bills.
- rxhernandez 9y agoI think you might be extending this model beyond its boundaries of usefulness.
- candiodari 9y agoWell it's a theoretical economics concept. The $20 bill is an opportunity, nothing more. A pretty good deal of course, but if you are pedantic you could defend the standpoint that you did have to do something to get it: first, get lucky enough to be there, notice it, then bend over and maybe clean it. So it's not "free", just a pretty good deal. The same thing applies to getting a job for instance. Take job X. If job X was available and worth doing at wage $, someone would be doing it. So why bother applying ? So what it really means is that the semi-strong and strong form of the efficient market hypothesis is bullshit: there are plenty of opportunities in the market, you're just not seeing most of them. I would argue that nearly everyone doesn't even try to see opportunities.
- _e 9y agoThis is why models are just for starting a conversation and not for predicting the future. Life has too many variables.
- edanm 9y agoMy favorite response to this: "OK, how many times have you seen a $20 bill on the sidewalk???"