Yes. I agree that the original post keeps going after removing differences in values because they don’t remove differences in marginal value, which is what matters. I am providing an example where properly removing the differences in marginal value results in no trade.
You are using a nonstandard definition of goods. Would you equally object to a market with only blueberries, apples and bananas on the basis that there is only one good available (fruits)?
The example world can be modified easily to use any utility function of the form a·red points + b·yellow points + c·blue points.
The whole point of making simplified models (economic or otherwise) is to reflect some underlying truth in a more grokkable form. But, if you remove the load bearing ideas when making the model it doesn’t provide any insight.
If all goods are perfect substitutes, then there is no trade. That’s all your model is saying. And that’s the same thing I was saying, though my previous post was less elegant about it. It doesn’t matter what the production functions look like: they key factor is the perfect substituiton on the demand side. And, as you said, redefining a Red point as 1/a Red points doesn’t change that conclusion.
Yes.
I agree that the original post keeps going after removing differences in values because they don’t remove differences in marginal value, which is what matters.
I am providing an example where properly removing the differences in marginal value results in no trade.
You are using a nonstandard definition of goods. Would you equally object to a market with only blueberries, apples and bananas on the basis that there is only one good available (fruits)?
The example world can be modified easily to use any utility function of the form a·red points + b·yellow points + c·blue points.
The whole point of making simplified models (economic or otherwise) is to reflect some underlying truth in a more grokkable form. But, if you remove the load bearing ideas when making the model it doesn’t provide any insight.
If all goods are perfect substitutes, then there is no trade. That’s all your model is saying. And that’s the same thing I was saying, though my previous post was less elegant about it. It doesn’t matter what the production functions look like: they key factor is the perfect substituiton on the demand side. And, as you said, redefining a Red point as 1/a Red points doesn’t change that conclusion.