Students of economics are armed with a formidable array of tools to “make decisions”. Being the keen scholar that I am, I wanted to see how they apply these to a “real-world setting”. I decided to look at the choice of optional courses in the final semester. The goals vary from “taking it easy” and “doing something different” to “preparing for a PhD”. So at the outset, I should say that there is no “correct” choice of bundles, and the choice depends entirely on the constraints (in terms of choices available and ability) and preferences (or goals).
I found that we aren’t spiritual enough to be able to optimise. There isn’t enough knowledge of the self, of self’s abilities, self’s preferences and whatnot. There also appears to be much social pressure that operates indirectly through social conditioning (even now!) – smart people take difficult papers, wise guys take “scoring papers” (I’ve never come across these in all my life, I used to think it’s an oxymoron. I know now that it’s just moronic), geeks take “theory papers” and the “take it easy” guys take the most mind-numbing courses available. Most of them don’t attend classes.
This is not optimisation! Dear old Slutsky and Hicks must be turning in their graves. We study all of consumer theory in the first semester, are introduced to choice under uncertainty soon after, ace exams in permutations and combinations in the second semester and then choose courses based on, well, none of the above. I agree that we were spoilt for choice in the previous semester and are generally spoiled in the last semester, but isn’t constrained optimisation the cornerstone of microeconomics?
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