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The Roles of Equilibrium, Optimality, Maximization and Discontent in Decision‐Making Processes
Author(s) -
Zinam Oleg
Publication year - 1979
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/j.1536-7150.1979.tb02876.x
Subject(s) - disequilibrium , maximization , economics , divergence (linguistics) , context (archaeology) , position (finance) , mathematical economics , power (physics) , ideal (ethics) , balance (ability) , microeconomics , law , thermodynamics , physics , medicine , paleontology , linguistics , philosophy , finance , biology , political science , ophthalmology , physical medicine and rehabilitation
A bstract . The concept of equilibrium plays a pivotal role in the neoclassical maximization theory. Equilibrium, or balance of forces, is an ethically neutral term, while optimum is a position considered by the decision‐maker as the most desirable, according to some predetermined criteria of optimality. Disequilibrium can be defined as a divergence between the actual and the desired performance. Within this context, the optimum position is attained when the ideal and actual values of the crucial variables measuring performance coincide. Disequilibrium analysis can be expressed in terms of the theory of discontent. Socio‐economic change caused by human decisions and actions is always rooted in discontent, which leads to determination to act. This determination, or will , is one necessary condition for change. The other necessary condition is the use of power to close the discontent gap. The coincidence of power to act and will to use it is a sufficient condition for change. To what extent a new equilibrium balancing aspirations and attainments is established depends on the relationship between the rate of change in the level of aspiration and the rate of change in the level of attainment. The theory of discontent has a much broader application to economics which is elaborated.