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Would Mark Zuckerberg Have Been a Good Economics Professor?
In the one factor model of ability, the best chess player would be the best boxer. Would Zuckerberg have been a great economist? Here is a direct quote from the New York Times, where he talks about what research questions interest him: Source
“The Facebook chief responded, “I’m most interested in questions about people. What will enable us to live forever? How do we cure all diseases? How does the brain work? How does learning work and how we can empower humans to learn a million times more? I’m also curious about whether there is a fundamental mathematical law underlying human social relationships that governs the balance of who and what we all care about. I bet there is.”
Economists, what do you think of that last sentence? He seems to sweep away the notion that there is heterogeneity as he asserts that there is a “single equation” that can predict all of our behavior. In a world of essential heterogeneity, each of us knows our own preferences. These preferences may change over time as we make investments.
As a businessman, the Zuck has incentives to claim that his Big Data nerds will uncover this “equation” because if he has it (or he can convince advertisers that he has it) then he can market products to his vast network. Note that this gets close to Galbraith's old debate with Stigler on whether Madison Avenue advertisers manipulated people's desires.
In the Zuck's world, he can make money predicting social interaction patterns even if he doesn't have a model for explaining why his predictions are currently accurate. Without such a model, he faces a Lucas Critique that his prediction might break down (the existing correlations he observes may not hold in the future) as incentives and “rules of the game” change.
So, given the discussion above — I reject the 1 factor model and continue to believe in comparative advantage. The Zuck should keep doing what he is currently doing.
Source: http://greeneconomics.blogspot.com/2015/07/would-mark-zuckerberg-have-been-good.html
