Opinion: We should all take a lead from this economics superhero to help us think rationally about how we are spending our time
It's time to meet a new superhero. This is an economics superhero, a powerful individual armed with complete knowledge, an analytical brain and one who weighs up the costs and benefits of all actions taken. This decision making superhero could be compared to Mr Spock from Star Trek or Sheldon Cooper from The Big Bang Theory. Meet Homo Economicus or Rational-Economic-Man, a character with powers that enable the maximisation of satisfaction and never-wavering preferences as consistent as a favourite spot on the couch.
Every decision we take is a strategic move, calculated to maximize satisfaction. Need to choose between two courses of action? Easy-peasy: run the numbers, weigh the options, and decision made. But humans aren’t always that rational. We're a bit more like Captain Kirk or Penny Hofstadter, juggling desires, emotions, habits, and irrational whims. If we could channel our inner Homo Economicus to help us think rationally about how we are spending our time, we would stand to gain more satisfaction from the choices we make.
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So how do we do this? Recently scrolling mindlessly online, I began to wonder what I was gaining from these interactions. What benefits was I getting from scrolling Instagram and TikTok? I’d recently started teaching a first-year university course on microeconomics and had been waxing lyrical about weighing up the costs and benefits behind decision making and how Rational Economic Man consumes up until the point whereby marginal cost equals marginal benefit but not beyond as it is not worthwhile. And yet here was I, doom-scrolling, able to talk the talk but certainly not able to walk the walk.
In rational consumer theory, we assume rationality surrounding our decisions. If economic theory were to be applied, even the seemingly innocuous act of scrolling through Instagram would become a battlefield of benefit versus cost. So when does the cost of scrolling start to outweigh its benefits?
For me, the benefits include that dopamine hit from watching funny dog videos or coming across a recipe I will try (sometime). There's also the benefit of seeing a piece of particularly impressive upcycled furniture or a new product promising the perfect head of curly hair. We all have different tastes and preferences and I make no excuse for mine!
Dog meets a puppy for the first time..🐕🐾😍 pic.twitter.com/DIDh13VeHY
— 𝕐o̴g̴ (@Yoda4ever) June 9, 2024
How does the law of diminishing marginal returns apply to my Instagram habit? Imagine spending some time scrolling through your feed. Initially, each swipe or new reel or new story brings a rush of excitement. As time goes on (and indeed it does), consumption levels get higher and higher, but the satisfaction or enjoyment gained from this content starts to dim. The additional benefit starts to decrease. Yes, I have seen some photos and videos that appeal to me, but what am I really going to do with them? I must have saved hundreds of posts on furniture restoration techniques, but that coffee table still sits as it was when I bought it a couple of years ago.
But now to the cost? My Leaving Certificate business studies teacher used to tell us "there’s no such thing as a free lunch" and how we chuckled. But everything comes at a cost. How else could I have been spending my time? Perhaps actually carrying out the upcycling as opposed to scrolling though the work of others or testing out the new recipe instead of just giving it a ‘like’?
Then there’s the cost of comparison, that thief of joy; an adage attributed to Theodore Roosevelt. In our hyper-connected digital world, Roosevelt's words remain significant, as consuming excessive content about the lives of others can incur a significantly high cost dressed up as envy, lower self-worth and reduced levels of happiness.
We should all seek to maximise our satisfaction so we should weigh up what we stand to gain against what we stand to lose
There’s also the cost of missing out on time spent with my children, time that every parent knows you don’t get back. There are those future costs incurred when they have their own mobile phones and I can hear them saying 'you’re always on the phone' as I attempt to control screen time. Now, that's a future cost that would encourage me to change my current behaviour. An accountant calculates tangible costs, but an economist considers so much more.
Rational Economic Man may only exist in the realm of economic theory and undergraduate economics modules. However, his rational approach to weighing up the costs and benefit of actions can offer valuable insights for us mere mortals when it comes to our own choices about allocating our scarce resources, such as time. We should all seek to maximise our satisfaction so we should weigh up what we stand to gain against what we stand to lose.
I hope Rational Economic Man would be proud of our ability to apply this practical application of economics to our daily lives, but he’s also self-interested so he may not even care. I guess nobody’s perfect, online or otherwise.
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The views expressed here are those of the author and do not represent or reflect the views of RTÉ
