Category Archives: Economics

Chapter XVIII: Rationality in Human Behavior

Assuming rationality is the foundation of human behaviour, we can model theories to generate future predictions. However, world reality confronts us to neglect sometimes this assumption. The individual will always make the best possible choice, as if it were a computer generated processor. What postulate can we infer from this fundamental theorem? Might we assume that this hypothetical, yet optimal idea is unattainable?This is a philosophical debate question: are all human rational behaviour based on rational axioms? Therefore, any irrational act is unintentional, or is it the opposite? Let us examine the effects of Rationality on a typical contemporary society.

First of all, what kind of inaccuracies people create?  Everyday life decisions, of course. Some are time-based, such as procrastination, lateness, staying up after nighttime, etc. Some are emotion-based: on purpose, such as anger, jealousy. (For a fact: thought can regulate emotions). Others, at lower intensity levels, are caused by an external stimuli, such as sadness, sorrow. Excitement, similarly, is also an interesting point to scrutinize.

Knowing those inaccuracies will benefit largely the following steps.

But Time is closely related to Rational thinking, cognitive process and emotional judgement. Why does an individual tries to fight instead of finding a mutual solution when facing someone he deems pugnacious? Subjective, impulsive act of hastiness. Theoretically, if this individual had 0.74352 seconds more, he could have made a better solution. Thus decreasing marginal fury will cause him to be more and more placid over time. We can therefore conclude that the consequences of opting an incorrect selection is much greater than the Willingness to reconsider an impetuous decision without any careful reflections.

This is the End of the Chapter.

Addtional Details:

Fact: If the time was an Enemy to conquer, we would hardly win the battle. Even with 7 487 673 094 people, Time would be the victor. Why? Because Time can run faster than anyone else in the Universe. Time has existed since the Universe was born, so even before that. The Earth’s fate depends on mankind. In mathematics, any variable in the Y axis given a possible function can reach upon Both sides of Infinity. Time can go beyond centuries and millennia, but it can never surpass the great doom of Infinity, for it shall be the Object of Reference for the sake of human’s understanding.

Also, the relativeness of time is crucial in our understanding of the principles of Logic. Staying seventy days in an lonely, isolated place might be equal to one year of schooling.  The great Einstein invented the formula of Relativity; for Time shall not depend on a same pack of individuals.

Human cannot predict time [to be correct, Time is a concept created by abstract humans to model reality], but can predict Nature’s Fate and their own. Trying to forecast financial activity of the stock market is one example that proves why it is with so much difficulty that humans cannot anticipate their own behavior with exactitude.

Chapter XVII: Examining Time


Assuming from we know from Economics, if time was a good, it would be a normal good. Based on their observed behavior, we can deduce the following empirical conclusion: people use wage obtained from hours of work to buy leisure time, which has many possible uses. It is impossible to save it, but possible to “invest it”. The probability that they would spend their leisure time, T­L,  ­on activities payback return (in other words, gratifying accomplishments) like reading, studying or writing. Another optimal choice is activities that generates periodic earnings, but to a certain extent, in which an excessive level of income is undesirable.

From a philosophical, metaphysical or even poetical way, time is reflected in youth’s splendour. From there we can conclude the following thesis: an event in life time occurs only once, if not brought on intentionally; for an event or incident (negative connotation) cannot happen twice, with the exact same circumstances. It is rather obvious that time moves progressively; to move regressively requires an artificially method. This particular method is actually burgeoning, with a highly revolutionary technology, virtual reality.  A consequence of time going backward would, if this statement taken word by word, “make every human being on earth experience their memories once more”. Would that increase marginal utility?  If people can live their most unforgettable life stories once more, by observing they past blunders, we can deduct they will pay attention to their future actions. But that is not yet possible. Time has still yet come…

Speaking of time…

Time is not visible even to the greatest optical instrument; however space is visible. By space we mean the environment, our immediate surroundings. If time is not visible, we want to measure the change in the environment. In Antiquity thinkers understood the concept when they see a very obvious change in weather, observed in seasons. From there, the Time system was created. A full year represents on unit, divided into sub-units. We can therefore deduct that every second correspond to a specific marginal change in the universe. So space depends on time. Space is the aggregation of everything on Earth. How can we divide space? With which possible techniques? Based on countries? Assuming that countries are not equally spread out in terms of land area, there is not a coherent structure for methodic analysis, therefore there is no place for constant linearity. Is surveying a good idea? What kind of sampling distribution it will generate? Instead, we may choose to simply form our research on existing literature and database. To do so the population density per kilometre squared is a good indicator. Unfortunately, this is an enormous range to work with. We might simply use metre-squared for reasonable purposes. And after evaluating this parameter, it seems legitimate that any individuals, with x standard deviations of the normal curve, using height as an indicator would fit well into these descriptive statistics for our results. Also, the Metric System is the optimal tool for this empirical framework. It is important to remind that we are working with a two dimensional space set.

Deriving for above, there is an important aspect to take into account, the Individual perspective, which divide, from eyesight, the environment. Two same individuals can never see the world from the exact same angle. And assuming we use sight to represent the totality of the five senses. Based on these assertions, we can confirm that this is the root of Subjectivity, for two individuals can never agree on everything.  This part is extremely complicated, follow carefully. We know that past experiences accumulates with time, which is equivalent into the number of memories. This variable can be translated into the number of changes in their environment with respect to one’s vision. Let technology be possible. We can fast-forward one’s lifelong journey into a fixed quantity of time, T, and set that to be the model with respect to the average life expectancy. By examining common events in individual’s lives, we can infer additional premises.

In mathematical terms, P(X)≠P(Y), where P stands for perspective, also point of view.

For next chapters/coming:                                                                                                                       Scientific analysis of the cause-effect relationship of music and memories



Chapter XVI: Defining Performance

Why is performance important in analytical research? Remember, our goal is to create generalized theories based on known assumptions. The word “performance” is the most adequate in the context of the research.

Performance is also related to productivity. In Economics, we define productivity as the quantity of output created by given input. Instead of applying this on a firm, we apply this to individuals, comparing thus the individual like an firms, with similar attributes.

In Economics,  there are three components when calculating the productivity of a firm. Production, cost and revenue. What are the equivalents for an individual?

Firm Rational Self-Interest Good or Services Time, Labour, Capital
Individual Rational Self-Interest Projects, Money Time, Energy, Mood

An Individual’s Attributes

Mood Energy
Emotion Mindpower
Consumption Production
Time Activity
Money Good & Services
Energy Activity

Mood is an Independent variable. It is irregular but can be predicted.

Consumption Production
Reading Writing
Eating Cooking
Listening Talking

Composing music produces something, so that means playing music is consuming the composer’s music. But playing music in a concert hall in front of thousands is producing, so each spectator consumes the music.

Chapter XV: the Relationship between Time and an Individual’s Aggregated Productivity

Consider the following question. In which way Calculus formulas could (or may) be considered in a asset to be used to Deductive thought, in such a way that Derivatives form the basis of Rational Thinking? (With respect to the definition of the derivative, and in light of the Principles of both Cognitive Studies and the Assumption of Rational Self-Interest)

Such as, in a way, mathematical functions are of new, innovative use to study Social Sciences. These functions would be applied theoretically rather than empirically, thus gaining for significant foundations of rational knowledge.

To me more concrete, consider the following example. The simple function model, f(x). is an universal, scientific method of expressing relationship between two variables. It defines a particular variable that depends on another.  Any letter can be set to denote a variable, which is extremely advantageous when dealing with constraint-based problem. It allows freedom of scientific expressions.

Consider time. Let time be a independent variable. Any other variable can be a function of time because all depend on the latter. Or is it so? Can time be an dependent variable? A very simple example is the amount of time, of the quantity of time. We consume time. Can time be considered as a good? Can we produce time? Impossible! We can save time, although.

Once one understands this basic, yet fundamental concept, we can related to another level of comprehension.

One goal of  this analytical research is find correlations among the most difficult variables.

Performance is the total productivity an individual during any given day. It is also the entirety of skillsets a particular person. There are many types of performances. Emotional management, objective accomplishment, physical well-being, etc.

The general function of performance is given by P = f(t), where tstands for time. Its unit of measure is given by a mathematical scale ranging from negative to positive values in a continuous spectrum.

The most utilitarian application of this deductive theory is to examine psychological behavior such in a way to predict events.

Chapter. XII: Analysis of decision making pattern

A key factor is to achieve stability of is return to habit. Neutral attitude towards people when occurring change of environment contributes also to stability. It is when the individual seeks praise, attention from others that problems begin to occur. Compulsive or irrational behavior is treated like outliers. No intervention in external affairs is good,  in a fixed environment. Status quo is for small matter, usually a good choice.  “Emotional self-bluffing” (also positive self-suggestions)  are very useful in dealing with outliers.
Focus on the equilibrium. Equilibrium directed. Satisfaction also deviates from the equilibrium. When the individual is pleased, the personality is weakened, so does its energy from the soul.
Indecisive behavior is dangerous, especially for sensitive individuals.
Communication affect emotivism. Eg talking to somebody. It’s the in the content of speech,  body language and tone of voice.

Another factor related to emotional level is the initial mood of an individual at the beginning of the day. The goal Is to Remove the standard deviation from mood fluctuations.

Stability involves thinking. Excitement causes disruption. Forecasting of the future involves excitement. However, excitement can have benefits, and can be ignited. Excitement is related to incentives, which could be extremely powerful,  therefore, confirming the theory of “Traps of Progress”.

Chapter IX: Some calculations

We can define any academic, social performance into one generalized equation with respect to time.



Also, just like in the economy, an individual’s performance is regulated  by cycles.

A complete, constant cycle is the goal, which is close to perfection.

Now what is interesting is the concept of trade-off, or opportunity cost.

Regulation is a schedule, which is everything is organized, the optimum, the perfection.

How could the graph for perfection looks like? On the horizontal axis?

Time on the Y axis.

Now what is the interesting is how much can the person extend his output, to what limit.

Can total output (performance) be decreasing? Yes, when marginal performance is less than zero. Decreasing return to scale would be useful. Decreasing marginal performance will occur.

We assume 1 unit of “perform” = one unit of time. Also, we assume that cumulative output is always rising, day after day.




Pre-work Considerations

  1. Goals
  2. a) Predict individual behaviour by using cognitive analysis.
  3. b) Understanding key factors in human relations
  4. c) Create a universal, numerical-scale based measuring system
  5. d) Improve analysis methods by focusing on structure and patterns
  6. e) Create a systematic solution to categorize abstract concepts
  7. f) Understanding the decision-making process (optimal choice selection)
  8. g) Create a method of quantifying emotion by measuring it


  1. Methods
  2. a) From a sample, generate theories that applies to a whole population.
  3. b) Using economic concepts to
  4. c) Simplify to clarify
  5. d) Detailed Explanation of Concepts
  6. e) Content Analysis of Games


Core concept: Equilibrium

List of Ideas

Strategy, Resource allocation, Opportunity cost, Decision making, Time/Timing (perfect moment/opportunity), Space/Distance, Estimation, Prediction, Aesthetic, Belief, Imagination, Energy (physical, mental)


– To reduce the margin of error, alpha

– To reduce confusion (incomprehensiveness, misunderstanding of human behaviour through cognitive analysis.

– Of the fundamental application of our theorem is to enhance the positive effects of cognitive behavioural therapy





Chap. 3 Opportunity cost

Opportunity cost is defined what must be sacrificed to obtain something in return. It basically equates two different situations. The opportunity cost of doing homework is equal to 45 minutes of sleep. The opportunity cost of moving a pawn to a particular square, could be equally possible as moving to another, or moving another piece. Basically it is very linked to outcome happening probability concept. Often time and money are used as references. An event can have different 机会成本 at the same time. But then, the chances that the alternative possible event happens is usually less than 50%.  We call the expected happening 机0. The independence of two events can be verified, either algebraiclly or rationally. We will focus on the latter.


Chap. 2: Interesting Information

A. (Calculus)
  • The rate of change of the gap (disparity) of the individuals’s performances through out lifetime.
B. (Stats)
  • The mean (average or expected value) of the correlations (degree of strength of relationship or link). The correlations has its own probability distribution function (pdf)
  • The mean (average or expected value) number of events that cause another one and their correlation
C. (Microeconomics) Realistic (Alternative) definition of the marginal utility.           Example with apples.
  • The skin represents 0.1% of the apple’s total volume. That additional (marginal or extra) amount of nutritious value . The skin of the apple represents is insignificant in terms of marginal utility, and implicitly the nutritious value.
D. Considering time as a good (resource), as an dependent variable. Leisure time is a good.
  • (Calculus)
    • Other use of the derivative. To measure the words
    • Similarly, using integrals in historical events (the summation,
  • (Stats)
    • The conditional probability is used to represent the cause and effect relationship
  • (History)
    • Analogy between one’s own life time and historical periods
F. (Metaphysics)
  • The materialization of thought.
  • Similarly, the dematerialization of things.
G. Similar to the previous section F.
  • Using the concept of derivatives like in the infinite mirror effect, the reflection effect, to explain a process repeated (iterated) an infinite number of times.
H. (Core)
  • The fundamentals are Link, Categorize Definitions
  • Link. Trying as much as possible to link [abstract] concepts such as derivative, materialization
  • Categorize. 
I.  Brainstorm. List all ideas.
  • Clarity. Subjectivity
  • (Econ), normal, positive, negative, absolute infinite
  • (Calculus)
  • Real, irrational
  • (Psy)
    • Behavior, mood, stamina, judgement, cognition.
  • (Stats)
    • Standard deviation, average, expected value
  • Time, future, value
J. (Calculus)
  • The inverse function, such as f'(x) gives. It is the opposite way of deductive thinking. It is also known as reverse psychology.
I.  (Social)
  • An incentive is like a trap (or a fish rod). It may be a self suggestion.
K. (Calculus)
  • The range (or limits) should be numerical. But they do no have to be cardinal. The ycould be ordinal.
L. (Psychology)
  • A deductive thinking process can be started from an empirical observation.
M. (Metaphysics)
  • Time can be stored. Time is a material. Time exists
N. (Metaphysics)
  • Everything is Binary System Based
O.  Various.
  • A mouse click is an opportunity cost.
  • (psychology)
    • Classic conditioning