Truism of Eating S#%t ? ?

kaya (1,267) Says:
April 17th, 2011 at 9:05 pm


An experienced economist and a novice economist are walking down the road. They come across a pile of dog shit lying on the asphalt. The experienced economist says to the novice, “If you eat it I’ll give you $20,000!” The novice economist runs his optimization problem and figures out he’s better off eating the shit, so he does and collects the money.
Continuing along the same road they almost step into yet another pile of dog shit. The novice economist says to his friend, “Now, if you eat this pile of shit I’ll give you $20,000.” After evaluating the proposal, the experienced economist eats the dog shit and takes the money.

They continue on. The novice economist starts thinking and finally says to his friend, “Listen, we both have the same amount of money we had before, but we both ate shit. I don’t see us being better off.”

The experienced economist answers, “Well, that’s true, but you overlooked the fact that we’ve just been involved in $40,000 of trade.”

ben (1,697) Says:

April 17th, 2011 at 9:22 pm

Kaya: haha cute example, but there is a gain from trade here.
The only way the experienced economist would offer $20,000 to the novice is if he got $20,000+x in enjoyment watching that.
The only way the novice would accept the offer is if he got $20,000 – y >  0, in surplus, if y is the cost to him of eating shit.
Rinse and repeat for the second episode.
Although they both walk away with the same money, there is a gain from trade of 2(x – y) > 0.
 Each has received enjoyment in excess of eating shit, which is a prerequisite for trade to occur.
Were that not true, nobody eats shit.
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Taoism: Shit happens. Catholicism: If shit happens, you deserve it. Protestantism: Let shit happen to someone else. Scientology: Crazy shit Hinduism: This shit has happened before. Islam: If shit happens, it is the will of Allah. Buddhism: If shit happens, it isn’t really shit. Judaism: Why does this shit always happen to us? Athiesm: No Shit.