Trust Me, I'm an Economist II

[bonfirejovi]

What a stupid video. If anyone couldn't identify that information in most cases is asymmetric before watching is video then they need some serious help. This has been the case for a very long time and yet the market, for all it's faults, has proved to be far more efficient than the government. There are items to help information become more symmetrical such as consumer advocates and fraud laws. Economists don't seem to realise it is unhelpful to replace a market failure with a government failure

[pigsnoutman]

@bonfirejovi Which video were you watching? There was nothing about government anywhere at anypoint in that video.

[david0aloha]

I don't think you can define it in black and white terms though, There's a lot of context. Say that you're a car enthusiast who recognizes the condition of the car immediately by looking under the hood - you could still be more trusting one day because you're in a good mood, or be unwilling to trust, regardless of what you know or do not know on another day, because you were ripped off earlier in the day and it still lingers in your mind.

You may indeed find yourself in a trusting mood.

[SpcMedia21]

THEN BUY A NEW CAR U IDIOT

[TheScumbug]

As if he will sell a lemon with a cam stuck in his face...

So if your buying a used motor take a mate with a cam and pretend to do a tv show..

Jobs a good un.

[adamcdaniels]

The point Harford's TV edoitor doesn't allow him to make (but the book editor did) is that if I can't tell between a 2001 Ford Focus with true worth £1000 and one with true worth £500 I would offer the average value of a 2001 Focus, £750. Knowing this the dealer would never offer the £1000 cars for sale, meaning that mugs like me would be paying £750 for cars worth £500 , which we would realise fairly quickly and stop buying. This causes the collapse of second-hand car markets.

[joebloggsgogglebox]

This guy is a perfect example of how economics can be uneconomical. He presents the most obvious life facts, wraps them in some fancy terminology, and tries to convince us that he is enlightening us with something new. Economists have been making a living like this for decades.

[manhammmer]

@joebloggsgogglebox Economics is the study of choices. He explains the difficulty of choice with asymmetric information. Relevant and not as well known to the layman as you may think. Joe, you need to be enlightened. Maybe you should go to your local community college and take a course or two.

[joebloggsgogglebox]

@manhammmer I teach econometrics at a world renowned economics institution, and believe me there are many more enlightening and interesting things to say about economics than this.

[manhammmer]

@joebloggsgogglebox While that may be true by your opinion joe, it is still relevant and necessary for those of us who do not teach at at one of the most renowned econometrics institutions in the world, whatever vague reference to status that is supposed to be.

[joebloggsgogglebox]

@manhammmer Are you trying to tell me that before watching this video you were unaware of the fact that salesmen will try to rip you off because they know more about the product than you? Or is it the way that it is presented and the language used that makes you feel you are learning something new?

[david0aloha]

@joebloggsgogglebox

No, he's supporting the fact that Tim is analyzing an element of asymmetric information in a context that most of us will face in our lifetimes in which it is a major purchase decision. Besides, Tim wasn't saying "salesmen will rip you off", he was saying that you don't know, and that's the problem. For all you know he's been there 20 years and thrives on return customers (finding that out can lessen the distrust from asymmetric information).

[joebloggsgogglebox]

@david0aloha Well, the description under the video says: "Tim Harford shows why you can't buy a decent used car", and in the narration of the video he does seem to be doing exactly that, which frankly seems a bit patronizing. If he is just trying to explain what "asymmetric information" means then fine, but he could have done it in a single sentence.

[david0aloha]

@joebloggsgogglebox

I think a big part of it stems from the fact that people learn better when there are examples, real world situations, things they can form connections to and relate to. People's brains are wired to make connections by association, mental imagery, etc. so when a topic like asymmetric information is presented like this, people are more likely to pay attention and retain it.

[adrianb1707]

Tim Harfords a great author. Unfortunatly I've never seen this program. Its good though.

[psikeyhackr]

There is the possibility that NO DECENT CARS ARE MANUFACTURED.

You economists aren't falling all over yourselves pointing out that the laws of physics don't change style year to year. There also seems to be a dearth of information on the total depreciation of automobiles.

[jdp125]

That's not what he's talking about at all. The only thing he is pointing out is that he has imperfect information and the dealer has perfect information.

[psikeyhackr]

The dealer doesn't have PERFECT knowledge.

The dealer has BETTER knowledge than most buyers.

It is 38 years after the moon landing. The manufacturers should have nearly perfect knowledge about what crap not to produce.

The economics profession maintains its IMperfect knowledge by not computing the TOTAL DEPRECIATION of the cars but add cars to GDP when we buy the junk.

We are supposed to be too ignorant to notice that our economics experts leave out that information for every country.

[jdp125]

The only thing the guy is saying is this. The dealer knows whether or not the car has some engine problems or something else wrong with it. The buyer doesn't have the opportunity to inspect the engine and other parts of the car well enought to know whether or not it has any problems. That's it...nothing about depreciation or anything else. Also, only newly purchased cars are added to GDP. The car in this scene is obviously a used car and would not be added to this years GDP because that....

[jdp125]

would be multiple counting. If we counted the car when it was first sold, and then counted again when it was resold, then we would count the same car twice. Another thing, if you don't believe economist account for depreciation then buy Microeconomics by Hubbard and O'Brien and read Chapter 10. Trust me, I'm an Economist.

[psikeyhackr]

He is saying Trust Me I'm an Economist

Economists define depreciation as applying to CAPITAL GOODS. They ignore the depreciation of durable consumer goods.

I have read Samuelson's ECONOMICS and checked LOTS of other places. That is Net Domestic Product. Consumers are supposed to be dumb. Economists pretend that planned obsolescence doesn't exist.

[dddduncbot]

I think there are probably more important things to get het up about pal. Breathe.

[abrilata85]

i love the book!

[kmisyuk]

true that