Charity That Defies Economics

Discussion in 'Economy' started by NATO AIR, Dec 24, 2004.

  1. NATO AIR
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    NATO AIR Senior Member

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    worth the 3 minutes to read.

     
  2. Huckleburry
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    Huckleburry Member

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    The problem with popular economics is that it folks very often have just enough knowledge to be dangerous. The standard model does explain corporate and private charity, and it does so rather eloquently. Utility curves measure different good bundles which yield different levels of satisfaction. A budget line reflects the different quantities of goods one can purchase with a fixed budget. The point of tangency between the utility curve and the budget line is where an individual is said to be utility maximizing. Nothing in standard theory excludes charitable giving from this model. Suppose that the executives, or employees of these companies derive a certain amount of satisfaction from charitable giving (that warm and fuzzy feeling one gets from doing a spot of good in the world). The objective to maximize your utility when confronted with a fixed budget line does not exclude charitable giving. That folks assume that such giving is not explained by the standard model only demonstrates their lack of understanding of that model.
    Merry Christmas
    Huck
     
  3. rtwngAvngr
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    rtwngAvngr Guest

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    What huck is saying in his longwinded fashion is "people value it".

    You're dangerous.

    Look how stupid you are: "Why would a supplier want to sell more units?"
     

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