True profit is always for free. It is, as Knight writes (1), "unimputable income". That's why change in profit doesn't change purpuseful behavior to undertake: it is not action-changing.
(1) Knight, Frank. Risk, Uncertainty, and Profit. 1921 -1957-. Page 308 (chapter 10, paragraph 29).
Saturday, November 27, 2010
Sherlock Holmes and economics
Think of a fictional character from a novel being very used in economics. Maybe, the first comes to your mind is Robinson Crusoe. It is so widely used that some people even talk about "Crusoe economics", the economics of an agent without interaction with others. Nevertheless, I find even more interesting the character of Sherlock Holmes. I guess he is the role model of what a good economist (any scientist, indeed) must aspire to be: "the most perfect reasoning and observing machine that the world has seen". Even if you don't agree with his method (I particularly don't think it to be as efficient as Conan Doyle depicts it), I guess you can, with great benefit for economics, define and debate about a sort of "Holmes epistemics".
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