Class 2: Advanced Microeconomics

September 26, 2016

Learn the basic economic framework of human behavior developed based on the entropy-constrained theory and its advantages over the marginal utility theory of economics.

SCEPA and INET are proud to present an online economics class - advanced microeconomics - taught by Duncan Foley, the Leo Model Professor of Economics at The New School.The series includes videos of 14 class lectures, including Professor Foley's presentations and discussions with students. 

Class 02: Entropy-Constrained Behavior 

The lecture begins pointing out the significant impact of the entropy theory on a variety of scientific fields. Moving on, the focus shifts to the economic approach and the audience is presented with two examples of the behavior model. In the first case an individual maximizes her pay-off function through a single choice, whereas, in the second case the payoff maximization occurs via a set of mixed actions. Afterwards, the utilitarian theory is contrasted to the mainstream marginal utility theory. The former advocates that the welfare is comparable among individuals, in contrast to the latter which argues that the interpersonal comparisons of welfare are impossible due to the inherently subjective aspects of welfare. This legitimizes taxation of the richest people, in case that people approximately have the same temperature. The second class ends with some simple examples and applications of this theory.

Advanced Microeconomics: Information and Behavior in Political Economy | Lecture 02 Entropy Constrained Behavior | Duncan Foley | Leo Model Professor of Economics at the New School for Social Research | Spring 2016