Tuesday, February 23, 2010

What does this efficiency stuff mean anyways?

For the past two summers I've worked the weirdest hours ever for a tour company working from 3:00AM-11:30PM. Because of this I've gotten the question "What do you at 3AM?" sooo many times now I just kinda of throw it off and ignore whom ever asked it. However, the reality is what you do when you work crazy hours if your Camilla is everyday near the end of the your shift you exert some flaming economic justice to your environment and watch your co-workers mouths drop open dumbfounded by your explanation of why you should leave (as the marginal labor productivity curve has began to bend backward because too many additional units were added at once)or get a weak smile and head shake as you say something stupid that is economical-comical. What I mean by economical-comical ties to all the weird things economists do and say in the name of "efficiency" like not rescuing a dollar. For me this at work is inventing new-fanguled-devices to clean things i.e. like my swifter pad staple mittens. After I made that particular device I exclaimed "I am an economist, hence I am efficient!"

My view of efficiency however is one that is built off of my inner nerdy gut feelings. These feelings allow me to resonate with Landsburg's statement that "Economist's know efficiency when they see it". I think though that even though efficient systems are easy to see they must be 1.)too difficult or 2.)too boring to explain and for this reason most of the Landsburg types are giddy to pick at "inefficient" systems rather than examining efficient ones. However when Landsburg gives examples of how a system (drafts/taxes) could be made efficient like other blogger's have noted he seems to be missing something. Typically the concept of efficiency often gets muddled with the concept of resourcefulness which I believe to be two different concepts. Landburg himself implies that efficiency is the avoidance of deadweight loss and the attainment of a situation where neither side is a loser.Even in Landburg's examples of what is efficient there is a visible loser(example even though his neighbor would pay $20 to get his lawn mowed he won't do it because he feels it would cost $30 to him). To me I feel at loss with this implication of the meaning of efficiency shouldn't be more multifaceted?

I think to Landsburg makes progress though at getting at what efficiency is in the next chapter of our reading when he gives the examples of the male birds of paradise, cows, and college students. In each of these examples Landsburg provides an example of an outcome that would be the most beneficial to all parties but then how the "cheaters" see what could be gained for them personally if they externalize some of the costs to others. When I read this part of the reading it was like a light bulb went off in my head except the light bulb looked exactly like a four-square court as I though "waha...the Nash equilibrium!!!!" I think the holes I have in fully being able to figure out what exactly is efficient and why we as individuals don't get to see enough of it can be investigated by moving to game theory and thinking about the woes of the Prison's Dilemma. When you have four outcomes you can "see" which one is the most "efficient" but this is not obtained as the players of the game chose the ti for tat option and everyone loses.
at this point......
I feel now though like I'm starting to run around in circles and if I go any further my nerdy gut feeling for efficiency tells me that I would be making a choice which would be inefficient with my time as I could be doing other things besides repeating myself and also inefficient with your time as well (if your even still really reading this). So the best option to me seems to be in to asking the group a couple of questions: Can a blanket statement as to what efficiency really is be made? (for the sake of efficiency!!!) and if so does anyone have any ideas as to what this would be?

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