Author’s note: With the hope to dig the natural economist in you, I do wish that you gain some insight from this post!
Aside from wanting to get the most output from the least input, what else could you have in common with an economist?
In the field of Economics, decision-making processes are supported by equations that narrow down options, over-simplifications of reality, assignations of measurable values to factors (even to something as abstract as feelings) and most of the times, through assumptions that limit the number of such factors to consider. Out of the latter, my most favored of all is assuming that everything else is constant aka ceteris paribus.
According to Investopedia, ceteris paribus is a Latin phrase which roughly means “holding other things constant”. It also cites a very good example:
… consider the laws of supply and demand. It could be said that if demand for any given product is outweighed by the product’s supply, ceteris paribus, prices will likely rise. The use of the Latin phrase in this example simply indicates if all additional factors that could affect the outcome, such as the presence of a substitution, remain the same, prices will generally increase.
I say this is my favorite technique because it is non-exclusive to economists. Why, the very moment anybody makes a decision, he is doing so under the supposition that nothing else will change except his own mind/will/action/speech.
For instance, suppose that a homeless person was able to see the weather forecast from a newspaper; he then starts to think about where he would spend the night and decides to sleep on a bench in a park. Our homeless guy of course, based this decision on his most recent memory of the bench a few days ago: He assumed the bench would still be there, empty and ready for him to use, thus prompting him to go and set his sleeping quarters on it. Upon arriving, lo and behold! the bench is no more and instead a picnic table is occupying its space. The protagonist of our make-believe story failed to consider that as he made up his mind and chose a place to sleep in, other forces were also at work, rendering his actions futile.
Having said this, it would seem senseless to fiercely defend the application of the ceteris paribus as it cuts back too much of what reality has in store for us…
So what’s the use of assuming as much (or as little)?
Now, is it safe for me to say that you also wish to simplify the process of making a choice by setting similar objectives?
Let me further explain: when choosing which fruit to buy favoring the cheaper one, immediately those in season come to mind. Certainly, other factors such as imported fruits, a sudden change in weather or transportation strikes are also likely to affect the prices of fruits; but as the probability of them occurring seems remote, the buyer chooses to consider them unchanged. This would be where he wants to simplify the causality between the product and its price.
Similarly, each time one makes a decision, it is not surprising for the person to consider other alternatives or a different course of action, “just in case”. In this scenario, the decision-maker has considered one outcome to have more tendency to materialize, but is aware that there is also a chance it might not.
Basically, I find that the utility of following this assumption (consciously or otherwise) is: it allows the decision-maker to get to a fast and (supposedly) efficient solution to his dilemma.
The economist in you
The application of ceteris paribus does not automatically unleash the economist in you. Biologists, mathematicians and physicists are also known to adopt this method. Your inner economist gets freed when your final aim could be easily summarized to, “the benefits (happiness, financial return, satisfaction, maximum profits, etc…) must outweigh the costs (annoyance, expenses, sacrifices, huge losses, etc…)”. You should be informed though, that you have already taken a very important step towards that direction- that is by trying to optimize the distribution of your available but scarce resources (your time and effort) through simplification of facts.
Life experiences have taught us that assumptions and simplifications only go as far as the complex reality would allow. Because of this, I can only suggest for you to treat the anticipated outcomes as tendencies rather than possible absolute results… taking the economist in you to a whole new level!
The power of this word lies in its practicality, since it conveys a proneness to an end result, not a promise. (I’m thinking that this is the very mentality which allows certain economists to sleep soundly at night). Think about it: it frees us from the expectation of a fixed forecast, and opens our minds to other prospects. Thus our perspective is widened, granting us an improved capacity to make better decisions- even if only because we are seeing more alternatives than before.
Now what you choose to do with the new range of choices spread out before you will most probably depend on the engineer, the cook or the public relations officer in you. Unless of course, you let the economist in you take the reins! (You should tell me how that worked for you.)
- Investopedia: http://www.investopedia.com/
- Merriam-Webster online Dictionary: https://www.merriam-webster.com