Econ final

Card Set Information

Econ final
2012-12-06 00:52:24
Econ Final

Econ Final
Show Answers:

  1. What is the most important feature of social organization according to Hayek?
  2. What does Hayek say about the extended order?
    social problem cannot be resolved easily
  3. Who is Doug North?
    Nobel Prize winner for recognizing that economic theory exists according to institutions
  4. What does Doug North have to say about institutions?
    Without them economic theory would fail to be applied. 
  5. Two types of institutions?
    Formal and informal
  6. What did North say when formal rules worked well with informal norms?
    Organizations would do better than when formal rules were ignored or conflicted with informal norms. 
  7. Why does a person want a formal rule?
    Clear expectations, reduce uncertainty of other peoples actions. 
  8. Why does someone want a informal norm?
    More flexible rules
  9. What's Elinor Ostrom's point?
    Economics misunderstand the way the world works because they look at everything on a large scale
  10. What we believe?
    World is a prisoners dilemma, if people were rational they would fail to cooperate. It would never be in their rational self interest. 
  11. What's the tragedy of the commons?
    If you leave something today it won't be there tomorrow. Consume all you can today and leave nothing behind. This would mean the world would be in miserable poverty or "zero contribution thesis." There wouldn't be any cooperation. 
  12. What we really see?
    That the world is in cooperation
  13. How do we solve Hayek's social problem?
    By creating ground-up rules. Good rules for one group may not be good rules for another. 
  14. What does Leeson's articles say?
    Government will make a society worse off, more worse than having no government. People will organize government regulation things without a formal government. This will result in a very low level of economic activity.