3 ms·
> Remember this is NOT an rational economic problem. There are good reasons to live near by the same neighbors that you know well for years. Why is a living ne
by aeorgnoieang 9y ago
> Remember this is NOT an rational economic problem. There are good reasons to live near by the same neighbors that you know well for years.
Why is a living near the same people you know and love irrational or somehow an inappropriate object of economic reasoning? You could even estimate prices for such things! Just because they're not typically represented as currency amounts doesn't mean they're not 'rationally economic' or that making tradeoffs that involve these things couldn't be better done with good economics.
- bluGill 9y agoGenerally rational economics assumes someone who is rationally trying to optimizes for other factors. You are correct that it is fully rational behavior for people. However that is not the definition used in economics. (sort of like physics tends to assume no friction where possible)
- sjy 9y agoNo such assumptions are made in the axioms of VNM-rationality[1] or any other model of rationality of which I am aware. If it is not rational to live near people you like it is difficult to see why it would be pay more for a house with any other luxury. [1]: https://en.wikipedia.org/wiki/Von_Neumann–Morgenstern_utility_theorem https://en.wikipedia.org/wiki/Von_Neumann–Morgenstern_utilit...