In a model, often people have the intuition that removing a transformation is ‘removing the need for assuming a particular value’, while in reality, it simply means they are imposing a trivial/extreme value.
Example, Joe: “Let’s take the unweighted sum of the next 20 years’ expenditures, instead of their present-value discounted sum, so we don’t have to decide on a discount rate”. In reality, Joe has, once again, sneaked-in a 0%p.a. discount rate, a value neither Joe nor most others would want to defend as a palatable rate. Joe would not defend that, per se, not discounting gives a clearer picture; and we would be readily able to agree with Joe on some substantially non-zero rate to be at least more realistic than 0%. Joe really only wants the ‘not discount’ such as to, seemingly, ‘avoid having to pick a value’.
A common fallacy that I think might have a name but I’m not sure anymore whether I’ve seen it anywhere, and don’t know how to search for it. Help anyone?
(Let me know if this an unworthily trivial question spamming the forum, happy to remove it in this case)
[Question] Name of the fallacy of assuming an extreme value (e.g. 0) with the illusion of ‘avoiding to have to make an assumption’?
In a model, often people have the intuition that removing a transformation is ‘removing the need for assuming a particular value’, while in reality, it simply means they are imposing a trivial/extreme value.
Example, Joe: “Let’s take the unweighted sum of the next 20 years’ expenditures, instead of their present-value discounted sum, so we don’t have to decide on a discount rate”. In reality, Joe has, once again, sneaked-in a 0%p.a. discount rate, a value neither Joe nor most others would want to defend as a palatable rate. Joe would not defend that, per se, not discounting gives a clearer picture; and we would be readily able to agree with Joe on some substantially non-zero rate to be at least more realistic than 0%. Joe really only wants the ‘not discount’ such as to, seemingly, ‘avoid having to pick a value’.
A common fallacy that I think might have a name but I’m not sure anymore whether I’ve seen it anywhere, and don’t know how to search for it. Help anyone?
(Let me know if this an unworthily trivial question spamming the forum, happy to remove it in this case)