Utility Maximization Quotes

The first rule of economics is that there is an infinite number of desires chasing a finite number of goods, services and resources. The first rule of politics is to ignore the first rule of economics.

Prices impose the most effective kind of rationing - self-rationing. Why is rationing necessary? Because what everybody wants always adds up to more than there is. . .Resources are limited but desires are not. That is the basic and defining problem of economics.

The classical theory of omniscient rationality is strikingly simple and beautiful.

Perhaps the most widespread misunderstanding of economics is that it applies solely to financial transactions. Frequently this leads to statements that "there are noneconomic values" to consider. There are, of course, noneconomic values. Indeed, there are only noneconomic values. Economics is not a value itself but merely a method of trading off one value against another.

Economics is built on the assumption of scarcity. Therefore, it deals with values and calculations. It cannot seek the good that fits a specific person within a given human condition. Where scarcity rules, ethics is reduced to numbers and utility. Further, the person engaged in the manipulation of mathematical formulas loses his or her ear for ethical nuance; one becomes morally deaf.

Just as a poetic discussion of the weather is not meteorology, so an issuance of moral pronouncements or political creeds about the economy is not economics. Economics is a study of cause-and-effect relationships in an economy.

Economists are economical, among other things, of ideas; most make those of their graduate days do for a lifetime.

How could economics not be behavioral? If it isn't behavioral, what the hell is it?

There cannot be overproduction of anything which men and women want. And their wants are unlimited, except by the size of their stomachs.

A society can be Pareto optimal and still perfectly disgusting.

Economics is not about goods and services; it is about human choice and action.

Traditional economics is based on imaginary creatures sometimes referred to as 'Homo economicus.' I call them Econs for short. Econs are amazingly smart and are free of emotion, distraction or self-control problems. Think Mr. Spock from 'Star Trek.'

If people do not know what is going to make them better off or give them pleasure, then the idea that you can trust people to do what will give them pleasure becomes questionable.

There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.

Economics is not about things and tangible material objects; it is about men, their meanings and actions.

Personally, I don't see old economics and behavioural economics as opposed. It is useful to assume people are rational as a good approximation to their long term behaviour, but it would be unwise not to think how in practice their behaviour may deviate from that simplifying assumption.

I have not been able in one lecture even to scratch the surface of the role of maximum principles in analytic economics.

Early in my doctoral training at Cornell University, I became immersed in the behavioral decision theory paradigm.

It is the business of economists, not to tell us what to do, but show why what we are doing anyway is in accord with proper principles.

Neoclassical economics ... has uncovered important truths about the nature of money and markets because its fundamental model of rational self-interested human behavior is correct about 80% of the time.

Economics is not an attempt to generalize human desires or human behavior; but to generalize the phenomena of price.

I'm an economic human without any likes or dislikes!

I practice what has come to be called behavioral economics.

Economics is a choice between alternatives all the time. Those are the trade-offs.

Understanding economics can help you make better decisions and lead a happier life.