Men obviously think hard about how to conceptualise love – that’s probably a good thing right.

Personally I think hard about anything to do with economics, so that’s why I’ve been commenting here. 

Isn’t that the next stage where I say caricature is inappropriate?

Whoah, are you trying to start a Sugden vs McCloskey methodology war here?! I think that deserves a post of its own 😉

The structure of the firm depends on the incentives of individual agents, and therefore on the type of contracts they make in that environment given the endowment of resources and other institutions.  This process is the same as the evolution of any social structure – and it was merely that metaphorical point I was aiming to get at in the article.

Now I’m waiting for someone to point out that using the term metaphor to describe the process of economic modeling is inappropriate, because we do not really believe our models represent reality that directly – instead they should be seen as a caricature, as they exaggerate a given element so we can explicitly describe and discuss the behaviour of said element.

It is all this constant debate that makes blogging awesome 😉

“Relationships are like households” just doesn’t quite have the same ring to it…

Hi Paul,

I do not disagree with that fact – but to be fair the article was tongue-in-cheek.  Both firms and households involve the inter-relationship of individual agents, and the only real purpose was to show how the same methodology can be applied to thinking about romantic relationships – typical Becker.

Also, if we view the firm as creating a good outside the firm we also need to recognise that this only occurs because there is some expected benefit from selling said good – benefit that is internal to the agents in the firm, in the same way that “at home” production by households creates internal benefit.  After all, it is this fact that allow us to use the same methodology in the first place.