Glamor Economics

Chapter 37

Chapter 5 Section 9 The best choice is the one that suits you—the optimal decision

When making a choice, you can't always stare at others. One mountain looks higher than another, and the one that suits you is the best.When we are still hesitating about what to choose, we should think rationally so as to make the best choice that suits us best.

A beautiful woman wants to know how to get rich.She posted on the financial page of a large online forum: "I am 24 years old, very beautiful, the kind of beauty that makes people feel amazing at first sight; elegant in conversation, dignified in demeanor, and I want to find a millionaire with a yearly salary of one million as a lover. But how can this be done?"

A Wall Street businessman wrote a reply for her, saying: "From a businessman's point of view, choosing you is a very bad decision (at least a rich person like me will not choose you)."

"Through your description, we can understand that the relationship between a man and a woman is a simple transaction of 'money' and 'appearance': Party A provides a charming appearance, Party B pays, the transaction is equal, and there is no deceit. However, here are It’s a fatal problem, you only have good looks, after a long time, the good looks will disappear, but my money will not decrease.”

"To put it more cruelly, from an economic point of view, I am an appreciation asset, and you are a depreciation asset. Not only does it depreciate, but it also depreciates at an accelerated rate! You are in your 20s now, and in the next 10 years, you can still maintain a slim figure Although your figure may degrade slightly every year, your beauty will disappear faster and faster. If it is your only asset, your value will be worrying after 10 years. So, you only want to rely on your beauty to complete this transaction, It is estimated that it is unrealistic, or the transaction will not last long. Instead of looking for rich people, why don't you think of a way to become rich?"

Everyone will face the problems of choice and decision-making, which generally reflect the following rules: everyone will naturally make decisions that seek advantages and avoid disadvantages, and choose the result that maximizes their own interests; people will clearly understand the choices they face Constraints, in order to minimize the cost you pay as much as possible.More choices means more choices and freedom for people.

There are too many objects to choose from in modern society. How we choose is also a test of our wisdom of trade-offs.Choice and decision-making is a profound knowledge. Only by thinking about problems with economic thinking and according to one's own actual situation and conditions can one make the optimal decision to maximize one's own interests.

In fact, there are many beautiful things in the world that you can never pursue. Everyone has different values ​​and objective conditions. Only the one that suits you is the best choice.In life, we can often see that many people see others make a certain choice, so they make the same choice with others, completely disregarding their own conditions, such choices and decisions are often unsatisfactory the result of.

In fact, the best choice is for yourself, not for others.It may not be the best choice for others, but it is the best choice for yourself, and that is enough.For example, Xiao Li and Xiao Huang both have a capital of 100 million yuan to invest, Xiao Li has a lot of research on plastic brushes, and Xiao Huang is very good at decoration design.For them, if Xiao Li invests capital in the decoration design industry and Xiao Huang invests capital in the plastic brush industry, I am afraid that it is not the best choice for them.

[links to related words]

Deterministic decision-making is the decision-making when the research environment is certain.Deterministic decision-making problems usually have a definite natural state and a definite goal that the decision-maker wants to achieve (larger gains or smaller losses), as well as multiple action options for the decision-maker to choose from, and different decision-making options can be calculated Determine the value of income.

Risky decision-making refers to the decision-making in which the environmental conditions are uncertain but appear with a certain probability.

Uncertain decision-making is a decision-making in which environmental conditions are uncertain, different situations (events) may occur, and the probability of occurrence of situations cannot be estimated.

(End of this chapter)