Thursday, December 2, 2010

My perception of utility theory and Rat Race


According to me everyone tries to maximize his
utility by taking a decision. I m not saying or
assuming that everyone is selfish but I m 
suggesting that selflessness also has utility 
attached to it and everyone has different 
function fit in there mind to convert a 
benefit to others(depend on who or what the the
other person or thing is) and benefit to 
himself into utility n person tries to maximize
it. Some person have a wrong formulae feed in 
there brains like in finance we make mistakes 
in using a discount factor similarly some have 
problems with this discount factor in formulae 
feed in their brain that they are not able to 
use appropriate discount factor for each 
situation/person as they have different 
priorities for each situation/person but rarely
reflect in there decisions.

Nobody is irrational even a person is willing  to lose to make others suffer is rational as he might be looking at future gains from this
behavior or he might be driving more  satisfaction from beating others than achieving something from himself. Taking an example  from my first class in game theory where we  played a game in which a person was given 10 Rs and he has to offer other person sum share of  it. if other person rejects 5 Rs will be taken  back by faculty n 5 Rs will be given to other  student then other student has to make an offer that first player can’t refuse else nothing  will be left with both of them. While  discussing the behavior of players based on  this game prof name a person phycho if he is  not looking at maximizing his pay-off instead  maximizing his share of left money. Such a  behavior is termed irrational but according to  me it’s just depends on person and its
future expectation of after its behavior all  these calculation/model is inbuilt in our brain and if you are able to come-up with a number u  r completely rational but with different  utility function that have highly positive  weight to winning over others or one might be  thinking some benefits other than just included in game the signaling some thing to class.  I think in india there will very high  percentage of people who will have high weight to winning and also to a satisfaction after  revenge these two emotions will play a very  significant role in their decision making.  We are always traped in a rat race. Always  looking to winning than doing something. Its  embedded in our brains by various social and  parental values to win at any cost. It started  to be obsession. We can't enjoy absolute  benefits/satisfaction. May be there is a reason behind all this probably we are always deprived of resources that changed our perception that  relative achievement is always better than  absolute one. Beware we are humans not animals we can understand all this shit so stop getting pleasure in others misery be human.