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> Are people good judges of how much value they bring a company? People are average judges, by definition :) I don't think that's very important though. There

> Are people good judges of how much value they bring a company? People are average judges, by definition :) I don't think that's very important though. There are two ways of looking at this, IMO. In the Hayekian sense, information flow... especially price information makes markets work. This is one of the of the reasons literal markets exist(ed). Markets "clear." All the metal, meat, etc. that needs to be sold gets sold. Even in modern times, you can get great deals on closing days (often sunday) in a literal meat market. Prices move fluidly, and if market conditions dictate that lamb cutlets are 75% off.. that price travels like the market quickly. The other major factor besides information flow is number of participants, fwiw. The other way of looking at it is as power gaps. Employers have relatively more power in negotiations because they have more price information.

bumby 6y ago
>People are average judges, by definition People may be, but individual persons are not. It’s the individual who is negotiating. I remember a psychology study about the nature of impromptu pay raises. For the initial weeks they were extremely grateful. After six weeks or so IIRC they felt like they were entitled to that extra money all along. We are incredibly adept at rationalizing the outcome we want. Who wants to admit they don’t deserve a raise when handed to them? People in aggregate may be good judges of value, but I don’t think too many individuals are. How many people do you know who will say they are insufficiently paid vs. paid too much? I think the best way to gauge your worth is to periodically put your resume out and interview. If you get a lot of offers that dwarf your current pay you’re probably under paid. If not, you may just be a bad judge of your economic worth
adolph 6y ago
In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people with low ability at a task overestimate their ability. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness of metacognition, people cannot objectively evaluate their competence or incompetence. https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect

bumby 6y ago

>People are average judges, by definition People may be, but individual persons are not. It’s the individual who is negotiating. I remember a psychology study about the nature of impromptu pay raises. For the initial weeks they were extremely grateful. After six weeks or so IIRC they felt like they were entitled to that extra money all along. We are incredibly adept at rationalizing the outcome we want. Who wants to admit they don’t deserve a raise when handed to them? People in aggregate may be good judges of value, but I don’t think too many individuals are. How many people do you know who will say they are insufficiently paid vs. paid too much? I think the best way to gauge your worth is to periodically put your resume out and interview. If you get a lot of offers that dwarf your current pay you’re probably under paid. If not, you may just be a bad judge of your economic worth

adolph 6y ago

In the field of psychology, the Dunning–Kruger effect is a cognitive bias in which people with low ability at a task overestimate their ability. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability. Without the self-awareness of metacognition, people cannot objectively evaluate their competence or incompetence. https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect