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Notes -
[Insert Graph that looks barely at all like the first one]
I was with you up until this conclusion. How on Earth do you look at that second graph and draw that moral from it. The existence of a tiny window where happiness is a decreasing function while being increasing in the vast majority of space suggests that the moral for the second set of parameters is "we should prioritize making indoor activities more fun because in almost all cases it increases happiness. Also we shouldn't pressure introverts to participate in social activities because they're clearly enjoying themselves more via their revealed preferences."
We get very different conclusions for the first and second set of parameters if we're being honest instead of using motivated reasoning based on a pre-supposed moral. The actual moral for the overall model should probably be something like "this deadweight loss phenomenon appears under some model parameters but not others, so the applicability of this to the real world depends a lot on the circumstances and we need to measure and investigate further to determine which world we live in, but it's an interesting possibility especially in less crowded spaces such as rural areas."
Yeah I think that's fair. I spelled out the situations I think it's realistic for in the middle a bit, though probably should have made that more front and center instead of presenting it as a totalizing view of society.
Sure. But then the second graph demonstrates the sensitivity of the model to this assumption. This turns out to be a critical assumption that heavily influences the results, at least the part of the results we care about. Therefore any conclusions/morals/takeaways need to emphasize this caveat.
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