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Date: | Fri Mar 31 17:18:55 2006 |
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----------------- HES POSTING -----------------
In response to remarks earlier by Tony Brewer and Patrick Gunning:
As Hayek (& Wittgenstein) suggest, any model, mathematics, or
statistical constuct assumes a _given_ known to the mind setting
out the model or constuct -- a given which implies everything
conceivable within the model. This holds true as much for the
_givens_ in a model of so-called 'incomplete' information as it does
for a 'perfect information' construct.
Similarly, a _model_ of choice under so-called 'uncertainty' is made
up out of _given_ elements -- given to the mind of the model
constructor. Yet those who make choices and behave in the
actual world live in worlds conceived in ways that are _not_
identically given alike to everyone -- i.e. each mind understands
and interacts in the the world a bit differently. Additionally, and
most importantly, minds are not restricted to a pre-given set of
possibilities, but instead they are capable of open-ended discovery
of things as yet unimagined, conceptually as well as in terms of
the relations between things. Think, if you will, of as yet
undiscovered scientific notions -- or new technologies. Think next
of new entrepreneurial opportunities. This sort of point -- of the
_non-modelableness_ of the real incompleteness of knowledge and
the uncertainty of action is well made by Israel Kirzner, among
others -- I believe Shackle & Popper & Hayek also had things to
say on this matter.
So the whole notion that literature of asymmetric information has
broken free of the 'perfect knowledge' assumption is based on little
more than a pun. Perfect knowledge in the sense of the perfect
knowledge or "birds eye view" implied by a tractable mathematical
model is still in the drivers seat in economics -- and the sort of
personal, 'subjective', and local understanding of time & place of
relevance to real choosing & behaving economics agents is still
largely missing from the explanatory understanding of the trained
economist. In this regard Pat Gunning's remarks -- and the
quotation from Knight -- are right on target.
Greg Ransom, MiraCosta College
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