Professor Garrison’s paper will indeed make me not forget indifference curve analyses whenever I pass through airports, train stations, and shopping malls. His analysis of the tradeoff between resting and moving towards the ultimate destination was worthwhile while and his indifference curve analysis provided a great insight into the decision-making process of the individual. However, there are some components that he failed to consider.
Individual preferences were not sorted by completeness as a precondition for choice. An individual could prefer walking towards his destination. This means the cost of walking on the elevator is affordable and he makes the choice. It is important to note that inbuilt preferences are important in determining the nature and shape of indifference curves that represent the tradeoff between substitute goods or actions.
Also notable in his paper was missing assumptions. One may argue that for a certain class of people in certain environments, a certain kind of solution will be optimum. In a hospital or emergency healthcare environment, for example, the well-being of individuals is a determining factor. While a doctor and his crew may run the moving walkway, the sick patient may standstill. This also highlights purpose as a driving factor for choice which determines the nature of indifference curves.
Furthermore, we may enter into a discussion on the economic cost of moving or standing on the escalator. Let us imagine an environment where everyone stands on the escalator and walks on the moving walkway and there are so many people ahead of one individual doing just that. Here, there may be an imaginable shame cost applicable to such an individual. So, to keep up with the behavioral joneses, the individual just acts as they do even though he may prefer otherwise.
Professor Garrison claims to be establishing somewhat universal applicability of neoclassical microeconomic theory but he fails to incorporate the important marginal concept. Neoclassical economists make calculations at the margins. As individuals, we make cost-benefit analyses, and the choice we will usually make sometimes on the marginal benefit to us. As far as the marginal benefit of doing something outweighs the marginal cost and there are no external conditions attached, we do that something.
How about time? Time is of utmost importance in micro economic analysis because our preferences vary and changes by external conditions, costs, qualitative factors such as mood and perception. To continue, the “rush” level in the mind of the individual making the choices will affect the level and shape of his indifference curve. The relationship of time with indifference curve analysis can be thought of in several ways. Professor Garrison mentioned speed and speaks of the timely reach of the train or plane by someone using the escalator. Speed has an inverse relationship with time and a direct relationship with distance covered. Standing and walking can be explained in the context of speed.
Indifference curve analysis is important so that we may have a better grasp of the concept of utility. As rational individuals, we make choices that maximize our utility function. Therefore, what I consider as the most important miss of this paper is its refusal to make the choice of the individual dependent upon the amount of utility the individual achieves. And, the decision he takes on whether to walk on the elevator or stand on the moving walkway had nothing to do with the marginal rate of substitution which may be derived from the individual’s utility function.
References
Garrison, Roger W. (2009). “An Armchair View of Escalators and Moving Walkways.” In Frank G. Mixon and Richard Cebula (eds.), Expanding, Teaching and Learning Horizons in Higher Education” Essays on Economic Education. Hauppauge, NY: Nova Science Publishers.