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A hundred-dollar bill is lying on the ground. An economist walks past it. A friend asks: "Didn't you see the money there?" The economist replies: "I thought I s
by cercatrova 4y ago
A hundred-dollar bill is lying on the ground. An economist walks past it. A friend asks: "Didn't you see the money there?" The economist replies: "I thought I saw something, but I must've imagined it. If there had been $100 on the ground, someone would've picked it up."
- paulryanrogers 4y agoThis analogy bothers me. It feels overly simplistic. To 'see' the bill--which the economist isn't even willing to believe can exist--in practice you need to observe and understand an increasingly convoluted financial world. Said another way, to know whether someone is really pointing out a bill on the ground or just another scam you'd have to understand crypto and/or arbitrage to the same or better degree than them.
- hedora 4y agoIt's more like: I know where you can find a $100 bill on the ground. I'm selling maps to it for $10.
- neaden 4y agoYeah, if someone is saying they are going to tell you where you can find a 100 dollar bill lying on the ground if you pay them $10s I would be suspicious.
- cercatrova 4y agoMy point is that humans are not wholly rational creatures. Due to that fact, there is always an opportunity for arbitrage. I never said it was easy though, it may well indeed require understanding of crypto and arbitrage, more than others.
- paulryanrogers 4y agoThanks for clarifying. IME the analogy comes out too often when someone is implying "stupid economists are overlooking obvious opportunity", yet their bill-on-the-ground is actually some convoluted, borderline scam.