## Wednesday, November 4, 2009

### Definitions:

I need a new word for "model" when referring to the ideas in the economic actors' heads that cause them to act certain ways. "Model" causes to much confusion because it seems to refer to more formal and academic types of thinking. Maybe "expectations" is better?

Ok, here goes:
Economic actors have expectations, when they act on their expectations and they turn out to be correct, these expectations are rewarded. When they are wrong they are punished.

Ok, I like this better.

#### 1 comment:

1. The one I use is "Economic actors consider their alternatives and pick the one with the highest expected utility. Alternatives that are available are based on the amount of scare resources available to those actors."

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