Nature of Competition: The Peril of Reverse Causation
In economics, obtaining a unit of utility is called: a gain, a pleasure or a benefit . A gain is sometimes metaphorically called “having a cake.” On the flipside, losing a unit of utility is called: a loss, a pain or a cost . A cost is often called a price , but we hereinafter reserve the latter for the meaning of “market price” in the currency unit. Two millennia and a half ago, Confucius would have said, “There are yin (-) and yang (+). Thou shalt not con-fuse them but fuse them right.” Enemies and foes. As the conventional wisdom has it, “We cannot have the cake and eat it, too.” Another: “No pain, no gain.” Still another: There is No Such Thing as a Free Lunch ( Milton Friedman ). The other: “People Face Trade-off” ( Gregory Mankiw ). Let us take on the metaphor. The cake when eaten renders a special kind of utility, ...