Here is an eight-minute clip
of Milton Friedman on legalizing drugs. Can you see the
importance of his belief that people know what is best for
themselves, and his distrust of government regulation? Do
you agree with him or not, and why?
Dan Ariely, author of Predictably Irrational, argues that many people do not act rationally when they make decisions over time. They tend to overemphasize the importance of the present and underestimate the importance of the future, and they know that they do this. One way to help people is to allow them to place constraints on their behavior, that is, to allow people to give up freedom of choice. His example in this video involves allowing students to impose deadlines on themselves to limit their own future decisions.
Does this view of people contrast with the view of Friedman in the previous video? If people do not trust themselves to make good choices, should we take the concept of economic efficiency seriously? If people do not make good choices for themselves, who should make those choices?
What the video below, used on the website aguanomics.com, calls an "all-pay auction," the text calls the entrapment game. Why do people pay more than a dollar to win a dollar? What is the best strategy in this game? Why does this auction have relevance to political lobbying?
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