My friend (although we have never met) and fellow economist Jon Murphy said recently, in a comment on co-blogger Pierre Lemieux’s article recent post:
When there are two options that take you away from the desired path, choosing the one that takes you away slightly slower isn’t really better.
I challenged Jon by writing:
Yes it is. Think about the margin.
Jon is good at thinking on the margins. I thought he would agree. But he did not do it. Instead he wrote:
I’m David. My point is that the two options presented take me even further away from my goal. This implies that it is time to look for a new margin or do nothing.
Commenter Vivian Darkbloom weighed in on my side, writing:
Being on the 30 yard line is not the same as being on the 10 yard line!
To which Jon replied:
Agreed. But when my goal is to be in the end zone, a play that takes me back to the 40 and another that takes me back to the 50 are both counterproductive.
Yes, both are counterproductive, but in economics we often compare two bad alternatives and choose the less bad one. Thinking at the margin works here too. 40 is closer than 50.
Now, if Jon had argued that the two alternatives are no different, then he would be right. But he made it clear that was not what he claimed.
Note: Pierre raises another issue in the comments, in response, and it’s a good point for Pierre to make. But that has nothing to do with my response to Jon.
