I was thinking about a decision that I make every day. It may not be purely an economic decision, but it’s usually a reasoned decision at the least. The decision I’m talking about is the manner in which I drive to and from school. Actually, driving is a series of multiple decisions in which one must weigh the costs and benefits quickly. Do I hit the gas or the brake on yellow? Incentives for speeding up are the rush of an acceleration and time saved. Costs would be a marginal amount of wasted gas, the potential to get a ticket, and the possibility of having an accident. Depending on the circumstances (am I driving home, or am I driving to school?), I might make a different choice each time. In general I have to choose between safety and fun; between getting “there” early or late or not at all. It’s another version of a tradeoff. However, it is possible to strike a balance between the two extremes of caution and recklessness. For example, perhaps I won’t run any yellow lights, and I won’t go above 60 mph on highway curves, but I’ll allow myself to graze 70 mph on a flat straightaway with no cars close in front of me. In that case, I’m cautious when I need to be, but the risk is low when I do push the envelope a bit.
- Kunal
2 comments:
When you talk about "striking a blanace between the two extremes of caution and recklessness" do you think you are outlining a "Driving Possibilities Frontier" similar to the Production Possibilities Frontier? If you think it is an acceptable risk to go 70 mph on the highway, then the point on the curve where you run the risk of a ticket must be higher, i.e. out toward the margin. How do you quantify where that margin is?
Sure, a Driving Possibilities Frontier seems like a good way to put it. I would say that the margin is about 75 mph, because most people drive about 60-65 mph and 10-15 mph above the "flow of traffic" is usually deserving of a ticket. That itself depends on specific conditions. There are some roads on which I know where cops hide out. In those areas, the critical point on the curve is quite low. On unfamiliar roads, I'm going to drive significantly more slowly. Late in the month, I know to be careful, because cops have to fill their ticket quotas, and the margin moves downward as a result. If there are cars speeding ahead of me, then the margin is whatever speed they have, which doesn't mean that I myself will drive that speed, but if I wanted to, it would be possible to do so without getting a ticket, the reason being that the cops will catch them ahead of me, and I'll see the flashing lights in time to slow down.
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