From: Phil Dunn (pscumnud@DIRCON.CO.UK)
Date: Tue Jul 06 2004 - 14:16:16 EDT
> >Hi Paul > >The link is equilibrium, I think. Physical thermodynamics and GE >are both dterministic equilibrium theories. But energy in the GE >version is not physical energy. It does not enter into the physical >conservation of energy equations. The first law in GE thermodynamics >is the conservation of the number of commodities in exchange. >Similarly for temperature. In one example, temperature is inversely >related to the rate of interest. But I think it would be wrong to >see a low interest rate regime as in some way 'hotter' than a higher >interest rate regime. In an irreversible change, where the change >in entropy is equal to the change in utility, I think it is wrong to >think of the increase of entropy as indicating greater disorder. >There is just a formal correspondence between the behavioural >'one-way rules' of non-decrease in entropy and non-decrease in >utility. > >I share you doubts about utility/preference orderings taken as >given. But, when considering reversible changes near equilibrium, >the orderings and cardinal utilities could simply be regarded as >fixed. > > >Paul C wrote: > >>I am just rather uneasy about having each agent as >>a thermodynmaic system since I have doubts about the >>reality of the utility schedules on which it is based >>and also to me entropy seems so tied up with integrals >>over probabilities that I have difficulty equating >>it with utility >>
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