Proverbs chapter 23 & Efficient Markets
[23] Buy the truth, and sell it not; also wisdom, and instruction, and understanding.
The advice in verse 23 is very good. However, there are two potential flaws with it from an economic perspective. First, it is not an equilibrium. From whom are you to buy the truth if those that have it sell it not? Second, one of the essential insights of information economics is that your actions reveal what you know. So even if you do not sell the truth, if you act on the basis of the truth, you will reveal it to others. While this might not be advantageous for insider traders, it seems to be a good thing for Christians. After all, aren't we trying to reveal the truth?
The advice in verse 23 is very good. However, there are two potential flaws with it from an economic perspective. First, it is not an equilibrium. From whom are you to buy the truth if those that have it sell it not? Second, one of the essential insights of information economics is that your actions reveal what you know. So even if you do not sell the truth, if you act on the basis of the truth, you will reveal it to others. While this might not be advantageous for insider traders, it seems to be a good thing for Christians. After all, aren't we trying to reveal the truth?
Posted by William T. Bogart on
Friday February 23, 2007 at 8:41am